not answer, but the first is on constitutionality. guest: if you are in my class, eric, you would get a write off the bat. the committee is authorized to come up with the plan, but it has to be introduced as a bill in both chambers. if there were to be revenue raisers in the bill, i would assume that we would have the house a bill be the vehicle for subsequent congressional action. congress has a way of getting around this problem. we have seen it periodically, but this should be relatively straightforward because the bills have to be introduced. there are no joint bills per se. host: this is a comment from frank, watching us in texas, retired from the u.s. army for 30 years and an independent.

>> and their vote counts no more than the most junior member. >> has a look around for the otherwise -- as i look around for the other way for this committee to happen, the parties don't want to lose that much control. there will be that to some degree within the party. we have republicans more or less willing to entertain revenue increases. it has far more control than the delegates. >> i am sorry to go back to this article, but then gave me a lot of jumping off points. not all members of congress -- if there was a random selection, it would not guarantee that the members have

the most expertise. faienough. having said that, we have expertise in congress, we have simpson-bowles. i suspect it it will not hurt for expertise. the fresh air of new players is what congress needs to make a decision. host: long beach, mississippi, pat. caller: good morning. looking at it from a historical perspective, we have been here before. the problem that i see has to do with whether or not the aristocracy over there in new york and washington is willing to really fight the real problem. the country is capitalist, but the government has never had to worry about any income. ever since they for the of the herld war ii -- forgave te

world war ii debt, the politicians and administrators have always been able to give raises. that is why the government cost so much, that is what the property values in that area are high. there are too many people laid- off. laying off entire departments, like i hear people want to do, it will just cause more problems. we get more and more laid-off people into the food pantry. is there any hope that they will say every politician or anybody making over, say, $60,000 in the federal government who has the decision authority will take half a percent pay cut per year for the next 20 years and get back to paying where they should be if that they had to do

something else besides borrow money? host: ok, pat, thanks. guest: absolutely, federal employees have borne some share of recent efforts to cut the deficit. members of congress will tell you that they have frozen their pay. it is hard to be sympathetic -- hard for them to make that case. these are really tough questions. there is no getting around that. the conflicts within the house and senate represent the difficulty of how to finance the government with all these demands, particularly in a poor economy, when there is disagreement about what the role of government is in turning around markets. it is an almost insurmountable problem. host: columnist charles krauthammer writes about the super committee. he believes it can be a success. he concludes, "the result of

such a grand bargain would be debt reduction on a scale never seen. world coidence in the economy would rise dramatically. we would be on the road to national solvency. could be done in three months. in three stages." is there any experience at the committee operate on this short a framework? guest: that is a good question. i'm having a hard time coming up with a committee that has been given such a short deadline. not to say that members are not always under the gun, given the annual budget an annual spending process. but it is a rather large charge here for this committee. again, as you said, there are plans on the shelf so they are not starting from scratch. certainly, the time constraints here are going to keep pressure on members not to deadlock so easily. host: many have their own staff they have to hire.

the time frame does not seem to leave enough time for them brght out with the administrative part of this be structured? -- enough time for them. how would it be administrative part of this be structured? guest: i am a little less worried about that, given how much efft hagone into, in all of these committees -- i'm a little less worried about that. the m -- i am more worried about the deadline of having to reach an agreement and reaching it fast. host: and the framework of the being put in place without all the members -- guest: absolutely. that is all underway. host: kansas city, barbara, democrat. caller: i have a comment and question, and i wille brief. i believe that the gop has been the pied pipers of negativity since they took office, and that is what brought down consumer

confidence. i wonder if this committee -- you now, the republicans lay theinicking and screaming on congressional floor until they got away, and i wonder whether this committee, since what reblicans want to do is have that deep cuts, if they hold their brth so nobody will agree on the committee, it will automatically get the deep cuts they what. i don't see how the democrats can win anyway, because all republicans have to do is just don't agree, and then the deep cuts they what will happen any way. the man who said that rich people pay 70% of all the taxes -- state bank probably have about 70% -- of all the money they -- they probably have 7% of all the money.

of all the money, so that is fair. with the tax increases if they don't agree, or is it just cuts? guest: you put your finger on the question that everybody in washington wants to know, what will happen with this committee? what will it take for one democrat to cross over to six republicans,r viceersa? what has to be kept in mind here about the republican strategy -- are they going to dig their heels in? will they refuse to do anything besides spending cuts? if that leads to a 6-6 vote, the republicans have to weigh the danger of defense cuts. there are divisions within the republican party between defense hawks and republicans who are

more committed taking tax revenues of the agenda. -- off the enda. host: we showed the new cbs-"ne york times" poll. how is the establishment of this commite play into member's understanding of public perception of congress' work? guest: there are a couple of things that drive people's views of congress. people's views of congress are never very good, even aftt the highest. it peaked after 9/11, rally- around-the-country effect. first, the economy, and that fact we have this committee is a direct consequence of the state of the economy. so it is not surprising to see

perceptions of congress so low, given unemployment and low growth projections. one element of public's views of congress is that the public picks up perceptions of how well congress is working. when congress blocks, and certainly -- that has been this -- when congress gridlocks, and certainly that has been the story for the past few months or so, when congress still -- >> perception goes down. we should not be surprised, but it is no less troublesome that the legitimacy of the institution is called into question. host: rosalita remembering when tom coburn walked out of the gang of six. i think that is a little harder to do this time around,

just because of the formal character, the statutory character of this committee, and how much attention is being paid -- host: as opsed to these frequent gangs, which are in formal comment -- informal comings-together. guest: much more freedom to do that when it is informal institution. host: you are on the air. caller: i was reading that this super committee -- they had the power to me up any kind of bill or law and congress votes yes or no about it, and if congress disagrees, the president can still vote yes and make it happen. i'm wondering, how are we having a republic if a small group people and the president cannot dictate what it is that the laws of congress, and by

extension, the people of america, have to go along with? i am not understanding how we are keeping ouremocratic republic if we are able to be told what we have to do. or maybe i misunderstand what this super-congress is all about. guest: excellent question. it is an almost a regar legislative process, but it does limit what goes on on the floors. the house has set up or down vo, the senate has an up or down vote. if it passes both chambers, it goes to the president's consideration to sign or veto. were he to veto, it would go back and they could override the veto. in many ways is a normal legislative process, just altered at the edges here. host: why can you not see at ivy oak happening if there is a mix

of cuts the -- is not acceptable -- why can you not see a veto happening if there is a mix of cuts not acceptable to the president? guest: he has to think about his reputation, whether he can govern, the attack on the economy. we saw the stock market completely tumble this week, some people say because of congress' inability to solve the problem. it might get one or two democratic votes, and it is not clear to me that this would be a far-right package that the president would want to veto. if it makes it out of the committee, it would have some support. host: j.d., independent.

in regards to the committee that is going to meet about these cuts, number one, do they know the difference between an entitlement and social security? they are two different entities, number one. social security was paid for by everyone who worked, and they expect it back, and yet there are iou' that are just basically a piece of paper -- host: o that other question. caller: second question, regarding defense cuts -- now, they can withdraw -- there are places we can withdraw troops from -- i am an army retiree myself. we >> we take you live to george washington university in washington, d.c. for the

national conservative student conference. you're watching live coverage on c-span. >> it is the leading of rich group for young people for the conservative movement. we hold conferences, with supply college activists of the resources and the knowledge they need to promote conservative ideas on their campuses, and we saved president reagan's bill of a ranch in california and preserved as a school house of reaganism to teach people about his ideas. i am here to introduce you to this evening's speaker. i think it will only get better because he has a leading figure in the conservative movement, and we have admired the giant portrait of bill buckley on the wall all week. he was one of the intellectual godfathers of the entire movement, and he specifically founded and serves as the editor of the national review.

he held a position -- that position until 1990. he is not only the editor of national review, he has a best- selling author and a prominent figure in the media. he was filling in for hannity. remember when they were on the same show as the other guy, and remembers thinking he did a fantastic job because he wasn't just one of those academic types. he wasn't just one of the sarcastic types that can rile people up. he had a little bit of everything. he could balance the intellect, the communication, and he was very effective at what he did. he is a graduate of the university of virginia. he was a conservative activist that that did a publication

called the virginia advocate. john and me in welcoming tonight's speaker. [applause] >> thank you. thank you, everyone. thank you for that kind introduction. you might have a career with radio and that voice. it is like being introduced by casey casokaysum. let me assure you that i am sincere in that sentiment because a very conservative guy that works in a very liberal new york city, it is a pleasure for me to be invited anywhere. just to give you an idea of the odd existence we have as conservatives, for the longest

time, our offices were located directly above the headquarters of the recording studio. the most interesting part of this was in the spring and the summer when we open up our windows and the unmistakable odor would come out and i regret to report a lot of day, it was produced in a haze of marijuana stomach. i think we have fans of marijuana in the audience today. a lot of your frustrated that republicans have taken over washington and we have not seen enough change yet. i assure you it is already a different place than it was in 2009 and 2010. every time i came down to washington, i was reminded of the famous winston churchill story when he was in opposition

to the labor government in britain. he went to the men's room and he was standing on one of the big trough style urinals. and the liberal leader came and stood right next to him and he got as far away from him as he could. he said, wow, you're feeling awfully modest today, aren't you. he said, whenever you see something large and well functioning, you want to nationalize its. that is the way it went here for about two years. but now its stock, and it may not be all that we want, but at least it is something. i want to talk to you tonight about abraham lincoln and while believe that the republican party today should be the party

of lincoln. why do i want talk to you about abraham lincoln? it has been a long way, i am sure you've heard a enough about barack, michelle, nancy, and harry. and i am working on a buck on lincoln, so i am very absorber with him at the moment. i think it is a fascinating and amazing period. we are becoming an industrial power and it is a very personal feel. when abraham lincoln issued the emancipation proclamation, someone was going there to do last minute lobbying and shows up on new year's day. every door is locked. he lifted the window and called in and goes and five abraham lincoln. you'd be shot about 10 different times if you tried this today.

let me go on here for about 20 minutes about lincoln and try to tease out some first and second principles. and we can really gave the civil war if you want or talk about anything else. let me get a quick a barometer of the lincoln. how many of you consider yourself fans? that is good. about 2/3? how many are skeptics or don't know quite where they are? there are few. how many southerners do we have in the room? a lot. how many folks from south carolina? two? any of the live in the vicinity of fort sumter? you guys might want to consider leaving the room. just kidding. let me talk a bit about clinton

personally, just as a prelude. he had an incredibly arduous of bringing. we have heard about the log cabin left. onlysn't a myth, and exaggerated the wealth in which he was brought up. when his family moved from kentucky to indiana, they did not have a log cabin, they had a three sided tent. it was open to the elements and they did not build a cabin until his family cleared enough of the woods nearby to get the material for a log cabin. there was a neighbor that lived miles away that remembered that my time, they received glowing eyes. it is a real frontier characterized by drunkenness, violence, and ignorance.

some people speculated that lincoln may not have met a creature that thought that the earth was round until he was a of a doll. he had about one year of formal schooling. he is almost completely self educated and had to go out of his way to be self educated. there is a story about him walking 6 miles to get a book of english grammar. he lived at a time when everyone had an intimate connection with death. when he was a boy, his mother died and his aunt and uncle died of something called milk sick. it sounds cut and charming now. the cows would wonder how can get poisoned, the milk would become poisoned and you would get paralyzed and die within a few days. are we serving milk?

don't be so squeamish. his first love died while he was courting her, spiralling into depression. in the white house, his son died. the sun that was most like abraham lincoln, a very bright kid and beloved by both his parents. it drove his wife halfway matter. she would try to reestablish contact with willie. lincoln would play around and he said that the spiritualists reminded him of his cabinet because they had such a diverging views on everything. there was an extremely odd appearance. every time you see him described, someone meeting him, they say his trousers didn't

nearly reached his shoes. he was walking around with this extreme high water all the time. when he introduced himself to the elite, he was sitting down on the stage and the story said when he stood up, people gas. he was very plain looking, some might say ugly. he thought god must love, and looking people because he made more of them than anyone else. we like to flatter ourselves and think that his greatness was attached to what he was to people. he was a brilliant man touched by genius right from the beginning. he would go into his room in the state of all night trying to puzzle it out and trying to figure out a way to explain in.

when he came to congress, he was delighted to go to the library of congress so he could borrow a book of geometry that he taught himself as an adult. he had an anecdote for absolutely every possible situation, an incredible memory and an incredible sense of humor. he used to joke to deflect attention from things that he wanted to pass by end to entertain himself. there is someone that met with him often in the civil war and got so frustrated with the cost of the anecdotes and jokes in he told him, look, i have to do this or i am literally going to go in saint given the pressures he was under. i want to hit four points about the content of his statesmanship and what he achieved. a little bit about why, how, and

what of lincoln. he was utterly devoted to this nation's founding, and the founders. he loved to talk about the old fathers. he said i have never had a sentiment that did not spring from the declaration of independence. truth be told, it is a little tough on george the third. when he went mad, the first allusion he had was that he was george washington. can you imagine the indignity. it is like barack obama waking up one morning in thinking he is dick cheney are something. the declaration was key to lincoln in of like a little participatory portion of the presentation. there are three key sentences that i think are key to understand the lincoln in this

country right at the beginning. i am hoping i could have some volunteer to come up and read these sentences. will your voice be as deep and resonant? that is the key question. you have to re-elect you needed. -- read it like you mean it. >> we hold these truths to be self-evident that all men are created equal. the among these are life, liberty, and the pursuit of happiness. that governments are instituted among men, deriving their just powers from the consent of the governed that any form of government becomes a destructive, the right of the people to alter or abolish it and institute new government

laying its foundation on such principles and organizing its powers in such form. after them, it will reflect safety and happiness. thank you. >> that is it right there. that represents the sum of human wisdom of the purposes of government. what do they say? very simple things. we get our rights from our creator, not from government. our right to exist prior to the government and we own them as a matter of natural law. the purpose of government is to protect those rights, and if government fails in protecting those rights, it loses its legitimacy and there is the right to stage a revolution. this passage is a direct steal from the most american of major

political philosophers. it really set out the basis for limited government and commercial capitalism as we know it. if you want to go even further back than that, this passage relies on genesis. if we are made in the image of god, this is what government should do and should be. what did the declaration mean for lincoln? that meant that the theory of our government is universal freedom. and you cannot have slavery or any coercive dependence of one man on another. no man is good enough to govern another man with of the other consent. this is the leading principle of american republicanism. he took this idea and used it as a weapon in the political battles of the 1850's.

he believed that the democrats have turned their backs of the declaration. they had turned their back on the a mortal words of the founder of their own party because they wanted to defend and accommodate slavery. you cannot defend the declaration of independence or defend the slavery. you either have to deny that all men are created equal or you have to deny that blacks are men. southerners are often did those things. that is the crux of the debate. are their rights that we have that cannot be violated even by a democratic majority? lincoln said there are, douglas said there are about. he said the declaration of independence is the golden apple in the constitution is a silver

frame. it is an image drawn from the bible, and it means that the declaration is the ultimate purpose of our government and the constitution in this to achieve that purpose. lincoln asked again and again, why is this a philosophical statement there? the american revolutionaries easily could have said, you're not representing us, we have this list of grievances and we are splitting. the have this philosophical statement in that document in his answer for why is there is encapsulated in this statement. all honor to thomas jefferson who in the struggle for national independence have equal this and capacity to introduce into a revolutionary document in abstract truth applicable to all

men and all times. and that in all coming days, a show the review and a stumbling block to the very harbingers of reappearing tyranny and oppression. they put that statement in them out for themselves so much, but for us. and for all subsequent generations so we will be called back to their troops. that is the way that lincoln used it. he thought that the promises of the declaration had its concrete expression, but just in slavery, but in economic advancement. all should have an equal chance. if there is something he hated beside slavery, it was economics cases. he hated the economic vision of thomas jefferson that we would

be living happily and undisturbed on our farms for evermore. that is the way his father lived. he was a subsistence farmer that never lifted up his vision to anything higher. lincoln haida think it is strong to say, hated him for it. he lives and him out to work and then take the money that lincoln earned. he said that high myself once was a slave and it is to that he was referring. he became a lawyer, and we tend to think of them as parasitic bottom feeders. but then, they were great champions of the new capitalist quarter that was emerging in this country. they helped set of the rules of the road, things like a bankruptcy and the land title litigation.

who did lincoln represent? the railroads. he said eyehole the value of life, it is a very strong statement, to improve one's condition. advocates of the south were defending themselves and the nation that they were proslavery that by saying in the north, there was waged slavery. people have to work for wages and not for themselves. isn't that the same thing? advocater -- southern wrote about the concept of the mud sill. any society has to have these muds those that exist to support everything else. lincoln's reply is that they think men are always to remain

laborers, but there is no such class. next year, he will labor -- to hire others to labor for him. that is the very dynamic of american middle class of society. lincoln utterly identifies himself with aspiration. there were supporters that came to the debate with a sign saying mud sills for lincoln. if you're going to make it possible for people to rise, you had to have a sophisticated financial systems of people would have access to capital. you would have an industrialized economy. and you had to slowly snuff out an aristocratic system fundamentally based on hierarchy.

his secretary of state famously used the phrase that we had an irrepressible conflict in the united states -- he said the principle of conflict, fundamentally, was the eternal battle between the privileged few and the underprivileged in many -- unpriveleged many. it opens the way for all, hope to all, and improvement of conditions to all. it is hard to imagine a more succinctly and of the economic promise of american life. as conservatives, we make much of principle and we need to focus on the value of prudence. the lincoln biographer phocis -- focuses on this allotted. the politics really have four

elements. you're concerned with outcomes, not just intentions. it is not enough to have just intentions or liberalism would work. ec problems of society ultimately as human nature, not just individuals that are wrongheaded. you realize things are going to go wrong and there is no straight line to glory. in this country, one way or another, you have a battle between romantic politics and provincial politics. people on his own side or romantic radicals. like william garrison that burned the constitution as a pact with the devil because of expected slavery. or the famous raid on harpers ferry. they were utterly clear list of

the consequences of their actions. he was always concerned with what the outcome would be and always realized there could be unintended consequences. what you really need is both of these things. you don't go from a society like the one that lincoln grew up in , all of those states banned free blacks from coming to their border. outsiders the agitating all the time, and you have that abolitionists who hated the lincoln and beating him about the head and shoulders calling him a sellout and an ignoramus. and you have lincoln who ultimately agreed with her they wanted to go, but his method was to put 1 foot in front of the

other and to see if he was going to be able to stand on that foot or not. he called the abolitionists, the unhandy as the devils he had ever encountered, but he said they are looking like they have the same goal and different methods of getting there. and freedom. if you take this vision and that method, you get the new birth of freedom. there are a couple of death about civil war that it was not about slavery fundamentally. at the confederacy who talked about the vision of the original american founders have said our government is founded on exactly the opposite idea. the foundations are laid in the cornerstone rest of the great truth that the negro is not

equal to the white man that slavery is not -- it is based upon this a great philosophical and moral truth. if you don't believe the civil war was about slavery, as the slaves. many of them learned about the emancipation proclamation of for their owners. this is you have beachheads, you had slaves fleeing to be free. the fact that they came to those for and forced the issue in the north and ultimately led to the chain of events that led to their emancipation. lincoln, in some sense, did not opposed slavery. he did his entire life.

even when he was in the illinois legislature. lincoln not just dissented but actually put down when paper his reasons for opposing that. he was appalled that near the capital, there was an auction block for slaves. you can see his deep humanity in his relationship with frederick douglass. he said he was the only white man he ever encounter that made him feel comfortable. after the second inaugural address, and douglas when to the white house for the reception. people did not want to let him and, and when lincoln season, he goes up and says, mr. douglas, there is no person whose opinion high-value more than years. he said it was a sacred effort. not for the first time in the

united states, our military became a great force. thousands of slaves flocked to its. the front lines of the union army became free to moving camps of free men. word began to spread, you have all of the laborers coming out. they came out and said a cray is the lord, they fell on their knees in front of lincoln and he had to say, don't mail to me, you must feel to got only and thank him for the liberty you will hereafter and joy. lincoln had the racial attitudes of his time, but you can see slowly, his mind changed. the big reason it changes because blacks were allowed to serve in the military and served

with honor. blacks were about 1% of the northern population, they made up 9% of the military. he said, there are some guys that say they don't want to fight for blacks. that is funny because they are willing to fight for you. his last speech at the white house, or live in the military service of blacks in mind, they give limited suffrage is to blacks in louisiana. john wilkes booth said that means negro voting. it is the last speech he will give. lincoln goes to see our american cousin, the secretary of war

doesn't want him to go. wilkes booth gets easy access to lincoln and shoots and kills him as we know. frederick douglass called it a hell black act of revenge. the secretary of war says, as he does now, he belongs to the ages. as lincoln. four point very quickly about lincoln. i would like to cast this forward a little bit. who else doing of the comes from relatively humble roots that has a great sense of humor and a kindhearted man who is a talented writer? anyone? ronald reagan. his father was an alcoholic and he was not living on the

frontier, but he describes having to drag of his father of the front porch. he hated nuclear weapons. lincoln was famous for pardoning deserters because he didn't want to kill these poor kid. his advisers feared that if there was ever a nuclear attack of the united states, he would not retaliate because he could not bring himself to cause that kind of mass murder. we know that reagan rode his own radio scripts and of course, he had a wonderful sense of humor. one of my favorite stories comes from when he was governor. this was in the 60's. his advisers want him to avoid these demonstrators, they were going out and back door.

he walked right through them and gets into his, and he's happy types, 30, unshaven, and they've started saying, we are the future. he cracked a window and he says, in that case, i am going to sell my bonds. there is a similarity between lincoln and reagan that is so counter to what we have in the white house right now. these were deeply modest man. they were deeply crowned the men and understood human nature. they were realistic. there is a reagan joked that captures this aspect. the story goes that the wife runs away with the gardener, and the neighbor comes by to try to come for this guy and he says, that is terrible.

and the other guy says that's okay, i was about to fire him anyway. he was utterly devoted to the founding, he loved the phrase "we the people. nobody was more eloquent about the power of the market and innovation to lift everyone in our country. he had his principles and he knew his ultimate end. he was willing to be flexible, and he created a great new birth of freedom and not just in this country, but globally. when the berlin wall fell, the great flowering of freedom all over the world, he must important similarity for us is that it revitalized a nation has moved ahead by drawing on the principles of the past. it was in the founders said they found the basis of the american future.

the founding and those principles are still under threat today. obviously a much different threat, but you have progressives running down our founding and our fathers for a number of years. the word debunking comes from progressive historians. if you want a perfect statement that captures this attitude, you can't do better than president woodrow wilson. he said the old political formulas do not fit the present problems. the reelection documents taken out of a forgotten age. we need to get beyond a declaration of independence. it is of no consequence to us. a great riposte to this was calvin coolidge when talking about the principles of our founders said, if anybody wishes to deny, the only direction in which he can proceed historical

is not forward, but backwards toward the time when there is no equality, no rights of the individual, no rule of the people. the principles of the founders are still under threat. the value of individual advancement is under real threat in this country. you can't have a lively commercial society of profit- making enterprises are taxed and regulated to a standstill. you can't have people getting ahead on their own if the important virtues of marriage and self discipline are washing away. if you have people on the right and on the left saying that there are jobs that americans won't do. i think we are in the monumental conflict in this country in the think we need a lincoln or

reagan type of revival. i am optimistic we are going to get it. i agree that got looks after drunks, fools, and the united states of america. it is so important. if you allow me another quote from lincoln, the struggle of today is not altogether of today. it is for a vast future also. he gave a speech as a young man where he talked about even back then, the united states was impregnable to military assault. he city can take all of the armies of the world, combine them. you can get the greatest military genius in the world, and the army could not leave a track on the blue ridge mountains heartache a drink from the ohio river by force.

he went on to say that if destruction be our lot, we must be the author and a finisher. as a nation of free men, we must live through all times or die by suicide. i think what we should do as conservatives and americans is to resolve to live. thank you very much. [applause] thank you very much. questions? but the way, i should have said, i recently got married, so i am

out just -- [applause] i am just now getting used to being wrong about everything, so please challenge me on everything. the married men in the audience particularly appreciate that joke. they may be smiling, but they are crying inside. >> i am from georgetown university and a member of the national journalism center. i agree with most of your analysis of, i guess, president abraham lincoln. how do you look at lincoln was a suspension of habeas corpus in maryland? that would be the one thing that sort of contradicts the constitution and the declaration of independence. >> it is in the constitution that you can suspended during a time of the insurrection. what is particularly controversial is that right at the beginning, he suspended on his own.

there was an argument about whether you needed congress to do it or not. he took a bunch of measures on his own authority that, in the best interpretation, were extralegal. he said to please bless these and they've lost them all except for habeas corpus. i think it was the correct call because you have the nation under a fundamental threat and if you do not get soldiers or an army into washington, the capital can collapse. you have a near insurrection environment. officials said to stop suspending the troops in done send them to baltimore. lincoln said, they are not moles, they can't go under maryland. it will have to get here somehow. he suspends the first on that

eastern trunk. i think it was unnecessary wartime measure, but he goes on to suspend it throughout the war and it was abused. a lot of the arrests had to do with incidents that were really gentle really -- genuine gorilla warfare. they say that as a mark against him, the people calling him a tyrant is going way too far. there is an election in 1864 that he thought he was going to lose and he still had that collection. his old of that goal was to save the country, preserve the union, and put it on the basis of freedom. these people were not libertarians' down there. you're laughing, i am not sure if you're laughing in agreement or in derision?

ok. >> my question relates to your anecdote about reagan and the parking garage. the u.s.'s credit rating got downgraded to aa, and what does that mean for our future? >> sell your bonds. >> what if we don't have any to sell? >> look, it is extremely disturbing. i imagine it was the s&p downgraded us? this goes back to something that was discussed all week. we were talking about this over dinner, and it is manifestly inadequate. it is ridiculously inadequate. i supported it because there was no alternative given the correlation of forces here in

washington. i think any republican senator and a republican president and we will take care of this problem. it is only dawning on me, it could really be true, when if you don't have another two years? that is a frightening prospect here it if you have europe going off of the cliff because the financial system is so interconnected, we could go into recession again. all of these numbers look much worse than they do right now. you have the banking system shaken to its core again. it is a frightening time for the country. the wisest thing to do is to never get anywhere close to the situation where you're running these kind of risks, but we did. >> i am a huge fan of the

national review. the first to jump into my first two questions, but i have another 13 >> unilineal gave a speech on lincoln, that was going to happen. >> the abuses that southerners suffer is what delivered to the south to the democrat party for so many years. he said there is a resurgence, the republican party is seen as the party of the south, but there are still hold out in rural areas. will we continue to see this trend? the blue dog democrats are almost nonexistent anymore. will that be a viable option in the south? >> stay at the microphone because you might have a comment on this.

you have a corrupt social system in the south that had to be broken. it is not broken during reconstruction, it is lifted in a corrupt deal. they are free, basically, how to repressed blacks and continue to deny them their rights. when that system broke, you saw the south slowly over time really rejoining the american mainstream. in joining the commercial dynamism that characterizes this country. that is when ec the south become a republican because you see broad swaths of people hav ing to pay taxes. republicans did not rise on the issue of race, it was the size of government and taxes. the new deal coalition,

pandering to segregationists. you have ignorance, where segregation -- a lot of people were not making enough money to pay for the new deal. the civil rights revolution broke that system, and it was a great deal of it to great deal for justice, and it ended up being a great boon to the party. >> i absolutely agree with you. the republican party is the people in the south who were more religious, so clearly, there is more of a bonding to the social issues and social platform to the republican party, but, also, you have the south -- the south economy doing far better than the rest of the sun belt. kind of in the long term, i wonder with these people moving

down into the south, bringing in different cultures, different ideals and a more liberal voting policy, i wonder if there will be a more viable option for democrats in the future. right now, the democrat party -- once you get -- basically tennessee envelope is completely decimated, except for florida, of course. -- basically tennessee and below. >> we could talk about this for a long time, but the south is freer now in economic terms than a lot of the rest of the country, so the stultifying hierarchies and structures that characterize the old south now characterize places like the midwest because of the size of government and union rules and what not, and in the south, you are able to build a more genuinely free market economy. that is becoming the locus of industry in the united states now. >> thank you very much. >> i attends stanford university

in birmingham, alabama. >> ok. do any northerners have questions? just kidding. >> i have always been taught that the main reason lee southern states seceded was not slavery but that they were underrepresented in the government and those sorts of reasons and that slavery was sort of a non-issue for a lot of people. that yes, and what i would say -- and this is obviously highly contested ground. do not take my word for it. draw your own conclusions. what i think happened is a version of what you are talking about, which is that the south really dominated federal government since the nation's founding, and with the ascension of the republican party, which is an entirely northern-based party, they saw that grip totally slipping away. why that group was so important to them, in my mind, was that they saw it as a threat to the expansion and ultimate existence of slavery. that is why i go and say it is

ultimately an issue about slavery. lincoln said his take on that was the south will agree to let the issue go away as long as we stop saying slavery is wrong. it's kind of simplistic, but there is something to that. whenever someone is in fundamental error, they do not want to be challenged. the south bend the abolitionist pressed because they did not want to hear about it. they did not want to know. it is easy for me standing here to condemn the south for that, but if i lived in that time and was on a plantation with a bunch of slaves, might you would probably be different, and that is something that lincoln had a deeply humane unmerciful view of all of this because the same thing was true of him in that there were interests involved, huge economic interests. i believe slaves were constituted the greatest source of wealth in this country, so eliminating it was a huge and

difficult deal. anyway, all of that is a way of saying -- in my view of it, slavery is the ultimate issue, but i do not want to get too much i am -- on my high horse about it, and there are people who disagree with me, even in the good city of birmingham, alabama. >> i am lost here and trying to get to ask you a question about lincoln the lawyer. the chief justice came to cambridge a few years ago and gave a lecture about lincoln as a lawyer. i have seen it online, and one thing that he talked about was when the dread scott decision came down, lincoln as a fairly prominent figure even then was asked his reaction, and instead of answering straightaway, he

went back to the law library, research overnight, and in the morning, he had come up with an argument as to why the scott decision was wrong. now in academia, you see a lot of debaters as to whether scott represented the original constitution or whether it was an activist decision by the chief justice, and i guess my question for you is -- do you think scott did represent the constitution, or do you think that it was judicial activism? >> i think it was judicial activism. i am not a lawyer or an expert in this area, but i think lincoln gets the best of that argument because the judge was basically saying that the founders did not mean to include blacks in the declaration and blacks had no rights we are bound to respect, and lincoln goes back and looks at the founding era and actually says

that blacks could vote in certain colonies. so they are obviously people. this was an issue that would come back again and again. if blacks are not people, why can you not just kill them? why is it not formally legal to kill them in the south? if they are like horses, why do they get to in certain cities walked around free and stuff? the judge's view was that we had progressed since the founding and views then and in the 1850's were more advanced on racial matters. therefore, the founders must have been even worse than they were. lincoln's view was that we had regressed, and i think his view was correct. he said the our patriotic rope has been tracked in the dirt and soiled, and we must purify of in the blood of the revolution. i think it was very stirring words and correct words and also

a warning and contemporary society, we always think things are going get better, that everyone is going to have more rights and we are going to get freer and things will get better all the time. it is not always true. >> i have not formally into business of yet. i'm following you. -- i have not formally introduced myself yet. for decades, liberals have bashed a conservative leader in ronald reagan, and in recent years, they have kind of backed off a little, given the mass popularity of the great communicator. what can be done to try to

prevent the false reagan-obama comparison from taking form in 2012? >> it is a great question. it is such blatant and shameless body snatching, and it is -- you know, they hated him at the time. they thought he was a dangerous lunatic and an ignoramus, and you basically could not read anything in the mainstream that said otherwise, and now, suddenly, he is mr. flexibility and reasonable, throughout his entire career, and what they focus on -- and they are not strictly wrong in this -- is one of the points i was talking about -- prudence. a statesman has to have an element of practicality and know when to be bold and when to be cautious and how he will get to his altman and. and match his means to this end, and that is what reagan did. there are times when he felt the correlation of forces was against him, and he had to take a knee and surrender. he did it on taxes in 1982.

after his big tax cuts, there was a revolt in congress, a deficit in helping the rich and what not. house was against him, democrats, and the republican senate went south, and there was no alternative. liberals point of that and say reagan was in favor of increased taxes, which is just absurd. it was entirely a tactical maneuver and being forced to give in. same thing with the soviet union. they say that reagan negotiated with gorbachev. it's show that reagan was in favor of negotiating with your enemies. well, yes, sometimes, but he spent his entire first term not negotiating with the soviets because he wanted to build up arms so we have the upper hand and the soviets knew we had the upper hand, and he wanted to wait until there was someone worth talking to, which he finally had in any form of gorbachev. this is just -- it is just a constant effort that you have to be the stuff back. the other person they are going to do it too and have already begun to is buckley.

by the time his biographies are written by the great historians, he will be a great liberal figure. they always want to, as they say, engage in body snatching with our people, and one reason they can do is because they have been so successful. the reason why everyone can is becausegan's ends he achieve them. we all now realize that actually you could drive the soviet union into the ground without a major war that caused a nuclear armageddon. that is what reagan said at the time, and they thought he was nuts. now, even liberals can accept it and look at his zigs and zags and try to make the case that he was not fundamentally one of us, and it is just absurd. >> i am the founder of tea parties to this, and i have been reading "the national review" since high school, so big fan of yours. i wanna throw you a curve ball first, and then a softball -- >> can you throw a soft curve

ball? >> my question is we have seen this developing throughout conservative media, but recently it was announced that big education is coming. glenn beck tv is focusing on students. what is the future of students as far as "the national review" goes? will there be something exciting for us to look forward to? >> yes. do you have any ideas? >> absolutely, listed in section would be excellent. >> we do have a higher education block on our web site. >> i intend to go in the direction of wanting something by students for students. that is what i would love the sea. -- love to see. the softball is just on behalf of the tea party movement, i

would like to know, what would you say abraham lincoln would think of the modern t party movement today? >> it is very much in the spirit of the kind of civic activism you saw at the time. outside of questions of ideology -- i do not want to sound like too much of a woolly headed, googoo guy here, but it is amazing and wonderful to see so many people involved. one thing i love about this period and the middle of the 19th century is voting rights were the highest i think they have ever been. people would go to a lincoln douglas debates and listen for three hours and one more. at cooper union, lincoln gave an hour and have speech, lots of legal, historical, constitutional evidence. he gives this speech. people did not leave. they wanted more speeches.

everyone up there on the stage with him, "we want more speeches." you have these nighttime marches of people carrying a torch is. when i was covering the ron johnson senate campaign in wisconsin, because everyone at one of these rallies was just saying, "we are finally awake." that is such a wonderful thing. he would have loved the reverence for our founding. what lincoln believed ultimately, and i think this is correct -- we like to think the constitution is our ultimate protection. it is not if you lose the people. public sentiment and public opinion is everything, and that is why you need people involved and engaged with every fiber of their being, and you need people pushing on all fronts with every means you can to change public opinion and shift the center of public opinion.

that is why -- you are mentioning andrew n. big education and glenn beck, and we need all these people pushing on all fronts. some of the things that we do not do as a publication, given our nature, but it is all for the public good, but if you can save this country and save our founders principal, you need everyone going on all cylinders. >> i was hoping you could comment on the creation of west virginia with reference to article four, section 3. >> yes, you got me. west virginia is even more problematic. do we have west virginians in the room? your state never should have existed. are you really a west virginian? yeah, ok. the creation of your state was constitutionally dubious. we love you anyway. he was desperate to get to the border area that he thought was

so important, and you had virginia in a state of revolt, and he did not really have a legitimate government of virginia that you could work with, so in terms of constitutional niceties, it is probably difficult to defend. i have never gotten the west virginia question before, and it is very good. >> my question is this -- you make a call to return to lincolnists, but this is a question i do not hear many people dealing with. do you think lincoln was right when he said that as long as blacks and whites remain among each other, that one would be superior and the other would be inferior and that as long as we remain integrated that both would suffer? >> no, i do not. one of the worst moments of his presidency -- you guys are bringing out all the bad stuff -- one of the worst moments of

his presidency had that meeting in the white house. the first time actually i think blacks had been invited into the white house, to urge them to leave the country. he was a lifelong advocate of colonization -- voluntary colonization, for what that is worth. his view for the longest time, if you are in favor of colonization, you believe that blacks are an alien in this country and are an alien body that should be rejected. i think his view, though, began to change, for some of the reasons i talked about in the speech, which is blacks began to serve this country. of 1850's were a huge time immigration. i'm sure it was true then because, seoul says is true now. he does not like the phrase african-americans because he says african-americans his have been in the country longer than most european americans.

lincoln's view in that matter was fundamentally wrong, and all i can say in his defense is that it seems he was slowly changing over time. if you look at the lincoln douglas debates, you will see he does change his tone, depending on where he is. illinois was a little bit of a microcosm of the entire country. their yankee, very pyridine, very republican, kind of a battleground. the south, settled by people from kentucky and slave owners. depending on where the debates were, link it would change his tone, but i think if you read it all very closely, he never gave away the fundamental principle that blacks were equal to whites. he was very cautious in the way he said it. are you familiar with the book called "forced to glory"? >> yes, i am. >> see, i knew it. you could not get that by me.

>> [inaudible] >> no, it is not an accusation. it is a book that makes the case that lincoln fundamentally share of the racism of american society and was really pulled kicking and screaming and very uncomfortably to doing what he did. >> that is accurate. thank you. >> as of late, northeastern states have fallen into democratic hands in presidential elections. given their struggles, i feel like they will eventually transition into republican states, but do you feel that a nomination of a presidential candidate like christie from new jersey would help hasten that process and help them more quickly transition into republican states? >> i wish i could share your optimism about the northeast.

but you have that to me, senator pennsylvania, which is just amazing. -- you have pat toomey. you are seeing that kind of traditional northeast and government-heavy labor union model of government breaking down. that is what christie is about trying to fix in new jersey. and you can see a democrat like andrew cuomo trying to fix it in new york, so maybe i should not be so pessimistic. ideally, yes, i would want a presidential candidate who is not a southerner because i think there's a little too much of a southern iteration to the republican party, and someone like christie to the northeast who is a little bit different. but christie is very likely not

going to run. our candidate from the upper midwest at the moment, tim pawlenty, is not doing so great. do you have any favorites in the field? >> john huntsman. >> ok. are you a republican? [applause] >> i am running for my home town's board of education, so sometimes i wonder. >> i am teasing. when i was away on my honeymoon, we went on this bike trip in tuscany. the first time in the enhanced and supporter was on this trip in tuscany. -- the first time in net -- i met a huntsman support appeared she was a lovely woman, but she was a moderate democrat. i think that is his base, and that is a big problem if you are running for a republican nomination.

>> i just thought the time was not very helpful to him, given the recent demographic thing. >> thank you very much. >> i am with the national journalism center internships program. i see a growing number of libertarians, and i know many have a problem with lincoln. how do you think that we should address libertarians in regards to lincoln or just in general? >> they are an important element of contemporary conservatism. buckley, one of the books at last collections, referred to himself as a libertarian journalist in the title. i think in terms of practical politics, though, you really need all three legs of the conservative stool. need the economic libertarianism

free-market orientation, the social conservatism, and the national security hawks. another thing that i found extremely heartening about the tea party is it really -- the hawkish foreign policy might be an exception, but the libertarianism and social conservatism are refused and merged. i am sure there are pro-choice tea partiers, but i have just never met one. certainly all the major tea party candidates have been pro- life. i think if you tilt too far in a libertarian direction and totally ignore those issues or kick them overboard, you are going to split the coalition. on a practical level, i think you need both. i do not think they can keep growing at the rate they are. there was so much disappointment in the bush administration that libertarians could form an alliance.

when you have what we had over the last of we're years, you get historic expansions of government. i would not be worried about libertarians' splitting off. i would not go too far in adopting a lot of their views on social issues, but i would acknowledge their importance. and if they had gotten their way over the last 10 years, we would not be in the problem we were talking about earlier in getting our debt downgraded. does that answer your question? >> yes, thank you. >> thank you very much. thank you, everyone. thank you very much. to thank you. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> thank you. i appreciate you being with us this evening. before we break for the night, and we will bring katy back up

in a minute, i just want to say a few words. it has been great having all of you with us this week. it has been a pleasure having all of you with us. i hope you all stay involved with young america's foundation. our goal is to provide you all with the best services and programs available to you in the conservative movement. we look forward to working with you on the never forget project. i do want to recognize a number of folks in the room before we break. we should first applaud that the staff and servers at george washington university. they have done a great job. [applause] we should also recognize my friend roger custer for his previous work on the conferences. roger, come on.

it is always great to have the young britain foundation with us. look forward to having all of you back next year. i would like to ask the entire team with young america's foundation to stand and be recognized. guys. [applause] these are the ones that are working hard behind the scenes that make things run smoothly and make sure everything is on time. appreciate all your hard work. finally, we need to recognize the hard work and dedication of katie-- [applause] i will turn the stage over to you. [applause]

>> i think we need to get pat a hand. [applause] all right, i just have a few announcements before some parting words. if you are in a parking garage below the writing center and you need a parking validation, please see me after i finish talking. after, but it also, that parking garages close on the weekend. there will be someone available in the lobby starting tomorrow morning at 7:00 a.m. if you are leaving before then, let me know, and we will figure out a way of you getting me your keys, your swipe card to get in

the building. so we will find a way to make that work. just want to kind of do a little quick rundown. what a week. we learned about the power of videos and investigative journalism. [applause] we learned a lot about national security. we learned about reaganomics. all about activism. [applause]

the sanctity of life. we got some genuine and engaging history lessons. [applause] there was a reception held on capitol hill, and there was a lot of food there, even though we got rained on afterwards waiting for the buses. but the food was good, right? [applause] and the speakers. we learn about american exceptional is them from dr. robert george. [applause] i know there'll be people left out in that. i am sorry about that. but one very important thing is we heard about reagan's ideas from many of our speakers, but especially our reagan 100 banquet speaker, senator rubio.

[applause] i just want to echo what pat said about young america foundation being a resourced. when you leave the conference, i do not want you to think it is over. you can call us. you can talk to us with different activism ideas. we are here to promote the values we all hold dear. when you are in class and on campus and think you are surrounded by a bunch of crazies, i just kind of want you to remember about the last day of this year's national conservative student conference win journey was playing and a bunch of people started singing. don't stop believing. [applause] don't stop believing in the ideas we hold dear. don't stop believing in individual freedom. don't stop believing in free-

market capitalism. don't stop believing in a strong national defense, and don't stop believing in traditional values. [applause] and i will end by saying the same thing as i said -- sorry, let me say that again. when i first came to a young america foundation conference and everyone had to introduce themselves and say why they are conservative. i will and with how i began my involvement. you will have to pardon how juvenile it sounds, but it is a quotation from larry the cable guide. -- larry the cable guy. it is merry christmas to all you political correctness and [unintelligible] anti-jesus, and had-a gun- toting, tree-hugging commies.

git 'er done. [applause]

>> in some late breaking news this evening, the u.s. has lost its aaa credit rating with the agency standard and poor's. we talk with a reporter about the possible impact. neil irwin writes about the impact of politics 4 "the washington post." he talks about the impact. why did s&p dropped the rating? >> balak faith that the u.s. government has the political will and discipline policy making to deal with our debt problem in a responsible way. as a result, they feel that we are no longer an ultra safe form of debt for investors around the

globe to hold, so they downgraded s. >> what about the congressional debt and deficit bill on tuesday. did that have any effect? >> obviously, if the bill had not passed and we had defaulted, it would have been even worse, but they felt that the process that got there was not one that suggested that there would be a reason and steady progress toward deficit reduction over time. it is not that the u.s. is incapable of paying its debts. problem and identified was that we may lack the political will, the governance to have good political decision making to get there in an orderly way. >> how will this affect interest rates? >> we do not know for sure. we will find out starting next week when the markets opened monday morning, but it is hard to imagine it will be good for interest rates. what will probably happen is that political investors will probably say they want to demand higher interest rates to hold the debt, so it might mean the u.s. government has to pay more

to borrow money, and those rates tend to trickle through to other borrowers. if you are trying to get a mortgage, this is a translation to higher interest rates across the board. >> what about other rating agencies? >> so far, they have not been inclined to downgrade. standard and poor's has been more aggressive than moody's and fitch. question is what it would take for the others to take the same approach and also downgrade. we do not know quite what that line looks like, but we continue to have a very divisive political process and an unwillingness in washington to arrive, and you can imagine other ratings agencies cutting their ratings as well. >> we were at aaa. we are now at aa+. what would need to happen to get the aaa rating back? >> it is hard to know. we do not know exactly what the line is for standard and poor's, what they would need to seek.

historically, when a country has been downgraded, it takes time. it is not as if you can be downgraded and then a month later, it gets reversed. these tend to be multi-year processes. question is do we over the next few years in the united states government -- is there a steady process towards more thoughtful less than we have had so far? >> what kind of impact do you think this could have on the international economy? >> it is again hard to say. we have never seen this before. we do not know quite what will happen. what we do know is that when there is destruction of the financial system, it is hard to know. remember with lehman brothers went bankrupt in september 2008, there's no obvious reason that should have caused a global financial crisis, and yet, it did. u.s. treasury bonds are deeply entrenched across the world financial system in all kinds of different ways. people in government are not expecting an economic collapse to start next week, but they are nervous. not know about how this will play out.

>> neil irwin, with the "washington post," thanks for your time. the bureau of labor statistics announced that the nation's economy added 117,000 jobs in july, dropping the unemployment rate slightly to 9.1% purity headed the agency testifies about the report before the joint economic committee on capitol hill. this runs about 55 minutes. >> the committee hearing will come to order. i want to thank everyone for being here. we are here to recognize the deputy commissioner who is retiring at the end of this month. we just had a picture taken. if it does not turn out, we will

do it again. we are grateful for your many years of service. i'm told that phil has been working at bls -- for those that do not know him in the television audience -- bureau of labor statistics -- since 1974. and he has served as the deputy commissioner since 2003, including a year-and-a-half as acting commissioner during the bush administration. so thank you for your years of service and your dedicated commitment to the united states of america. we are grateful for that service. is this your last hearing in congress? we will try to make it memorable for you. [laughter] [laughter] in the past few weeks, we have gotten a number of economic reports, including today's employment report, about which we will talk mostly about, and

no matter what report it is, i think so many of them indicate to us the the fragility of this economy, and some of the basic weaknesses that we are seeing. the gross domestic product numbers released last friday showed that economic growth in the first half of this year was weak, growing at an annual rate of less than -- unfortunately, less than 1% during the first half of 2011. this week, we have received additional data that suggests that the pace of the recovery is decelerating. months ago, we were saying it was moving too slowly. now, there is some evidence to indicate actual deceleration. two examples of that or two highlights -- first, the so- called rasm manufacturing index dropped to two board are% in july, while this mark the 24th

consecutive month of expansion in the manufacturing sector. it was the lowest reading since 2009, since july of 2009. on tuesday, we learned that in the month of june, conmer spending declined for the first time since september 2009. consumer spending, as many of you know, accounts for 70% of u.s. economic activity. that needs to be growing and not shrinking, obviously. i know that the committee members and those in the audience aee that we need mh stronger economic growth. there should be and will be and will continue to be a bigger debate about how to achieve that. the labor markets, we know -- and we will get further into this today -- faces significant challenges. more than eight quarters into the recovery, unemployment remains above 9%.

nearly 40% of the unemployed have been out of work for six months or longer. hard to comprehend that. almost half of them out of work for six months or longer. we need to be immediately focused on providing incentives for job creation. just yesterday, this committee, the joint economic committee, released a report on the near record long-term unemployment workers continue to face. couple of highlights from that -- first of all, while so many groups within this study are having a great difficulty, if you are one of the flowing, your challenges are even greater than the population at large. the following categories -- those with a high-school degree or less, olderorkers, construction workers, and african-americans. those categories -- those group of unemployed americans face

disproportionately high rates of long-term unemployment. second, the longer aindividual is unemployed, the harder it is to find work. if you look at both ends of the spectrum, those out of work for more than six months and those out of work at the other end of the spectrum, for as ttle as five weeks, those who are at the end of the spectrum are three times as likely to find work in comparison to those at the other end. third, employers report they are having difficulty finding skilled workers. we know that is a continuing problem. i think we can move quickly, despite all that bad news -- i think we can move very quickly on a couple of strategies that will help. first of all, and others have been pushing for the so-called small business jobs tax credit act, which would create a o- share quarterly tax credit equal to 20% of the total increase in

employee wages. if you are hiring and increasing your payroll, increasing your wage levels in total, you can get a tax credit for that. vice chairman brady and i and others have been working on the life sciences jobs and investment act. a good idea. it is a way to create both high- paying jobs in the country but also to move forward on healing and hope that comes from the discovery of new scientific advancements. third, i would say it is a way to get jobs back from overseas. third, we ought to make the research and development tax credit permanent. i do not know why we do not do that, but we should. we also need a new approach to manufacturing, actually have a strategy to make sure that we are following in the years ahead

and especially even in the next year. one of the small glimmers of hope in some of the bad economics and jobs data has been manufacturing. this year alone -- i am sorry, since the end of 2009, manufacturing has added 290,000 jobs. a little bit of good news in the midst of all this bad news. we are going to hear a lot more today about today's report, and we know that during the month of july, the economy added 154,000 private-sector jobs. that is good news, but obviously not eugh. the overall number is 117,000, a lot better than they the last two months individually, but certainly not nearly enough. so we've got a long way to go with strategies to create jobs and incentivize the creation of jobs. with that, i will turno our

vice-chrman. >> thank you, chairman. commissioner hall, welcome back to the committee. thank you for your many years of service. you will be missed, and we appreciate all that you have done for the committee. clearly, today's increase in the nuer of payroll jobs provides relief to the market, mainly because it exceeded such very low expectations. that is certainly nothing to celebrate today. the unemployment rate fell largely because a 193,000 decline in the labor force. the number of employed people in the household survey fell by 30,000 year the broader measure of unemployment remains over 16%. what troubles me is that we have the fewest number of people participating in the work force

in a quarter of a century. those are not signals of a healthy economy. two and a half years ago this month, president obama signed his historic stimulus bill, promising to jump-start the economy, restore consumer confidence, and put people back to work. today, with historic numbers of americans desperate for work, consumer cfidence plunging, the risk of a double-dip recession and growing, and the stock market reeling, it is long past time to pull the plug on the president's failedconomic policies. i do not fault the president for trying. lord knows he has thrown every big government solution at this economy, but it has not worked as we wanted. i have now concluded the white house simply does not understand how to create jobs in america or certainly at least not government jobs in america. how much longer must americans watched their economy stumble? after trillions of dollars in poorly designed stimulus and

monetary intervention, must 9% unemployment be the norm? after all the big government bullets have been spent, how many more years will families and businesses suffer until america enjoys a strong, prosperous economy again? america has been more than patient, but after two and a half years, enough is enough. you have tried and failed to revive its economy. america deserves better than a second-rate economy ridiculed by other natns. when the economy is headed in the wrong direction, common sense dictates you change course. instead of threatening to raise taxes on job creators on main street, we need to lower the cost of capital, increased business investment that has proven time and time again to create real jobs. instead of rebranding companies as somehow an american for competing in the global marketplace, we should tear down the barriers, reduce the cost of

regulation and taxes that place the miles behind at the starting line, and lower the tax gate so an estimated $1 trillion in american profits stranded abroad can flow back home to be invested in america right now in jobs or research, business expansion, and a stronger financial future. passing the three pending trade agreements will create 250,000 american jobs. putting our energy companies that to work in the gulf, alaska, and in a bun and america feels on shore and off will create more than 1 million new amican jobs this decade. another 800,000 jobs will be saved this decade merely by calling a halt to the president's new national health care law. that will also eliminate costly cloud of worry among small, medium, and large job creators throughout the country appeared much more needs to be done, but perhaps nothing more impornt than the white house and in its campaign of demonizing our job

creators, who built the economy and will do so again if washington can g out of its way. the news reports on the economy today are often given with the capital or the white house as a backdrop, not along main street or in front of the headquarters of an american company the entrepreneurs to make critical decisions and create jobs have been forced to become washington-century because washgton is directing this economy to a degree not seen in our lifetime. that is the problem. washington needs to get out of the way and needs to end its job-killing rhetoric, the regulations, and interventions and give americans confidence to do what we do best. we need to create economic opportunities based on what the --ket demands, not on what's

what washington demands. we know our perilous debts are shaking markets in confidence and abroad. we also know from economic study their our global competitors in similar straits have booed their economies significantly and soon by reducing their debt, by cutting spending and restoring business and consumer confidence. congress has taken -- eluding the winding down of the wars in iraq and afghanistan, without recent passage of the budget control act, the government would grow to over 23% of the size of r economy this decade. with its passage, the federal government will shrink to 21.6% of gdp this decade. president reag began to reduce the size of federal government relative to the economy as well. the federal spending shrank

from 22.2% of gdp in 1981 to around 18% in 2001. entrepreneurs on main street traded 37 million new private- sector jobs, but we have lost almost 3 million private sector jobs. i will conclude with this -- america deserves a strong growing economy that fully employs are people and is the envy of the world. we cannot do that to we pride that heads of washington of the throats of the job creators. we will create jobs if we change course today and get government out of the way. >> congressman cummings -- >> good to be with you again, i concur -- commissioner paul.

i am sure you have given your blood, sweat, and tears. so many of our public employees are getting called everything but a child of god. i want to thank you. i thank you for what you have given. i thank you for the lives you have touched and i say thank you for a grateful congress and a grateful senate. and also a greater will nation. i also want to take a moment -- today's report indicates that in july, employers created 117,000 jobs and the on a planet right dropd to 9.1%. these numbers are moving in the right direction but obviously, we have a long way to go to resolve our economic challenges and to insure that everyone who wants to work can work. last week, we learn that the economy grew just .4% the first

three months of this year and only 1.3% in the second quarter. in june, american consumers decreased their spending. additionally, the already battered housing market which continues to be a severe drag on the economy took another hit in june as existing home sales fell sharply due to cancel the sales contract. unfortunately, the policies coming out of congress are doing nothing to rebuild confidence or spare us economic growth. according to many experts, they may even hinder the recovery and causes us to give up the small gains that we have already won. an economist at barclays capital has warned that the debt deal that carper struck earlier this week could reduce economic growth by 1/10 of 1% in the

first year alone. he said when the economy is only growing 1.5%, many economists feel thiis not the right time to be fighting fiscal restraint. similarly, a chief global economist at deutsche bank advisers asks," why would you want to read - impose restraints on an economic recovery that is already fragile?" you remove spending power from the economy at a time when it needed. there is likely -- that is likely to make the economy weaker and in turn the budget gets weaker because tax revenues are going slow. the recent nosedive in the dow suggests that others may agree with this assessment. investors like all americans are worried that congress is unable or unwilling to address the most

important issue facing this nation -- the need to create jobs, jobs, jobs. some of the terrible consequences of our failure to focus on restoring economic growth are made clear in the results of a recent pew research center analysis which found that the wealth gap between white households and african-american and hispanic households is the largest since the government began reporting on income 25 years ago. specifically, the housing bobbled and the great recession took a much deeper toll on black families and hispanic families than it did on white families. we c do better and we must do better. i voted against the debt deal because i could not in good conscience support the use of a manufactured crisis' to implement ideologically-based policies tha would further

threaten our nation's economic growth and job creation potential. further, the debt deal tends to reduce our debt by reducing discretionary spending, requiring deep cuts in programs critical to our most vulnerable citizens. at the same time, the deal demands nothing, nothing from the wealthiest americans or from corporations that are receiving billions in tax breaks. i believe that as we work to reduce what certainly is an unsustainable level of debt, we need a balanced plan that prioritizes the restoration of economic growth and that upholds our full faith and credit of the united states for what should be a national commitment -- for what should be shared sacrifice. i believe this is only fair given that the national debt we now face has been created by increased spending and by

forgone revenues resulting from tax cuts provided tohe wealthiest among us. with that, i yield back. >> thank you. i want to introduce dr. keith paul. hall. he is the commissioner for statistics for the labor -- for the statistics departmen he analyzes and estimates the central statistical data to the american public, the u.s. congress, other federal agencies, state, and local governments, business and labor. dr. hall served as chief economist for the white house council of economic advisers for two years under president george w. bush and prior to that, he s chiefconomist to the united states department of labour. he also spent 10 years at the u.s. international trade commission. he received his b.a. degree from

the university of virginia and his phd degree in economics from purdue university. we're grateful you are here with us again and we look forward to your testimony. >> thank you. thank you for the opportunity to discuss the employment and unemployment that we released this morning. non-farm payroll employment rose by 117,000 in july. the unemployment rate was 9.1% in july and has shown little defensive movement since april. private sector employment increased by 154,000 over the month. health-care employment rose by 31,000 in july as hospitals and ambulatory care services added jobs. retail trade a but increased by 26,000. and love and expanded in the manufacturing sector by 24,000.

mining employment grew by 9000 or the month and was up by 140,000 since the most recent low in october, 2009. employment in professional and technical services continue to trend up with industries adding to refer to 6000 jobs since march, 2010. health services was flat over the month. other private sector industries showed little or no change in july. the employment in state government decrees by 23,000 over the month. the decline was almost entirely due to the partial government shutdown in minnesota. local government employment continued to trend down over the months since an employment peaked in 2008. local government has shed 275,000 jobs. from the survey of households, the on employment rate w 9.1% in july. the jobless rate has held in a narrow range between nine. 0% and 9.2% since.

44% of people have been out of work for 22 weeks or longer. this proportion was unchaste over the month and year. the labor force participation headed down from 64.1% to 63.9% in july. the proportion of the population unemployed was unchanged over the month at 58.1%. non-farm payroll employment rose by 117,000 in july with private sector adding 154,000 jobs. the unemployment rate was little changed at 9.1%. as i close my officl statement, i would like to take a moment to recognize my colleague the deputy commissioner of bls. this is his last appearance before the joint economic committee after a 37-year career with the bureau of labor

statistics. he is retiring in august i thought it would take a moment to voice my appreciation for his work and make a note about is a clear rebuke -- about his career and accomplishments of the year. he joined bls in 1974, a graduate of the university of maryland with a degree in economics and social worker in his first position was eight gs-7 economist position and he has now risen almost entirely through the ranks. he has held veral positions including supervisor, economist, chief of the division of labor force statistics and assistant commissioner for a liberal analysis. he h been the deputy commissioner since 2003 and served as the acting commissioner between 2006-2008. he has been by my side of these hearings and in the day to day operations of the bureau. phil has dirtly work with literally most of the members of the bls family.

he continually meet with every new staff member to walk them into the bureau as part of our new employee orientation. he has been a big part of our long and rich tradition as an independent agency charged with providing accurate data free of political consideration or manipulation. he has been a big part of that and he will be missed. on behalf of all the employees, i want to convey our sincere gratitude of his service for the american people. we wish him along happy retirement. >> thank you very much for your testimony as well as your tribute to phil. i wish some of the economic news was as upbeat as your tributary e. i wanted to start -- there is a lot to talk about and a loto be concerned about, frankly.

one of the sentence and from your statement that just jumps off the page is at the bottom of page two. "of the 13.9 million persons unemployed in july, 44.4% have been out of work for 27 weeks or longer." that is a stunning number. it has been a recurring problem about long-term unemployment. can you put that in some historical context in terms of -- of months? >> the number of long-term unemployed, the share of the long term unemployed, work at easily record levels. it has never been this high in the history we have been

collecting this data. the number it is extremely high. it is particularly concerning because one of the things that economic research has consistently shown is that the lumber somebody is unemployed, the longer it takes them to get re-employed. this will be a real challenge going forward. the median weeks of unemployment has basically doubled during this recession from five weeks to 10 weeks. there is a large share of people who have been unemployed for more than one year. these numbers are clearly vy >> >> you say they are historic numbers? >> both in level and percent in any way you look at it. >> in the testimony i gave today, i mentioned a couple

categories where the numbers are disproportionately higher. i did not put the number is in but i want to review those. the african-american unemployment rate in this report is what? >> it is 15.9%. >> what was the month before? >> it actually declined 3/10 of 1% but that is not statistically significant. >> the african-american number for most of last year seems like it has been in the 14-15 range. is that right? >> yes, it has been probably over 15 for most of the time. >> i also mentioned a few other cateries. the americans who are unemployed and have a high school diploma or less, what number is that? >> that on point rate is 15%.

>> that has been there that i that long? >> yes. >> because there are so many reports and some as data out there and sometimes it is hard for people that follow it closely to keep it straight, we know we get the unemployment rate derived from the so-called household survey. those numbers have not been very encouraging. that household survey has indicated a weaker employment situation than the survey of employers. how would that be relevant? >> four months and months, you will sometimes the difference signals before the -- between the household and the payroll. if you look at it over a

slightly longer time like three months, they tend to move to get a pretty well. -- togher pretty well. you don't often get a conflicting picture for very long between the two. >> if you could describe the survey of employers and how that is arrived at? >> the employer survey is an establishment survey. we are surveying places of work and it is a very large survey. it is something on the order of 440,000 eablishments but it represents something like 40 million people we are counting directlyvery month is a very large survey. and it is pretty accurate. the drawback is we are surveying employers who are just looking at t number of people on payrolls, what their average hourly earnings are doing and we want to get more rich detail

where we go to the household survey and collecting demographic information about education and ethnicity. the two together give you a complete picture or as complete a picture as we can of the labour market by month. >> thank you very much. >> i share the concerns about the long-term unemployed and the longer they're without a job, the bigger challenge is getting them back to work. one of the areas that continues to trouble me because it is a sign of weakness in the labour market rather than strength is the labor force participation, how many people are actually in the labour force or actively rticipating. it has declined ye again in july to about 63.9%. this is the lowest since the early 1980's. it continues to stay there.

are we selling into a new normal where there are going to be fewer people participating in the work force and therefore higher unemployment rates? >> i hope not. know but i can tell you that so far in this recovery, we have seen no recovery at all in the labor force participation. that is something that is typically starting to rise and should rise during a recovery. that is an important phase of the recovery is when we start to get people entering back into the labour force. once that starts to happen, we could get a better idea of what the new normal will be and what the participation rate will be like. >> it looks like it will take a while. any ideas what the factors are?

>> this has been a severe and long recession and we have had a large number of unemployed. although long-term unemployed have stad in the labor market longer than in the past, we still have quite a few people exit the labor force. entirely. i think it is the severity and length of the recession. >> at the current rate of this month of 117,000 net jobs, for the average person back, wondering how long we'll be stuck in tough economic times, at the core rate of 117,000 jobs per month, how long would it take to regain the payroll jobs total we had prior to the recession? i understand it would be years. >> at 117,000, we would never regained. you need about 130,000 just to

absorb the population growth. in terms of recovery, you should look at how far above 130,000 we should get. that is really the recovery. 117,000 is still treading water. >> thank you. congressman cummings. >> thank you very much. i was listening to what you were saying. theh regard to people in labour market coming back in. let's talk about those who are starting out. a few months ago, millions of our young people graduated from high school and college and while many of them are pursuing higher education and we have had testimony before this committee in the past where young people

-- we were told that young people, many of them were basically kind of spending going into the job market and depending upon their parents, staying in school to get master's degrees and graduate degrees. what kind of pressure does the influx of job seekers place on the labour market and what are the employment prospects for recent high school or college graduates? >> i think our data supports what you said, that the new entrants into the labour market are having a difficult time finding work. if you look at something like the employment to population ratio and break it out by age range, members of the population that are working age that are 25 and below, the

employment population ratio is very low and it declined considerably during this recession. the g concern is that at some point you start to feel like you're getting a generation of high school and college graduates whare not finding work. th could put a real strain on the labour market going forward. that is something that we should be concerned about. >> the significant part of the 2009 recovery act was a provision to a state and cal governments to protect jobs of teachers, firefighters, police of a server ,etc. much of that aid is coming to an end. is the state and government local job market trends and how much are the trends in this market contributed to the overall rise in unemployment?

>> right now in most industries, we are no longer losing jobs. we are at least holding constant and growing in some. onnotable area where we continue to lose jobs his government employment. in particular with both state government and local government employment. they both lost significant numbers of jobs, more so than in most past recessions. with state government, it might be the biggest decline w have had ever during a recession. >> it appears that less money will be going to the states. it has always puzzled me -- we hear these comments that we should not raise taxes on the richest of the rich during a fragile economy but at the same time, in my state, we have had to lay off people and we had

furloughs and i'm sure that is happening in a numb of states. yet these people and even on capitol hill, in our committee th i am the ranking member over, we have employees who have taken a 5%-10% cut and we have federal employees whose wages have been frozen. and that is in a fragile economy. can you talk about the minnesota situation? your referenced it and tell me about that as it relates to state jobs. and your statistics. >> will not produce the official statistics for minnesota but -- we have not produced the official statistics for the state of minnesota. they laid off about 22,000 workers. i believe they held onto about 13,000 that was a significant layoffs.

that was pretty much the bulk of the decline in state employment this month. >> we've got some folks getting ready to run out of unemployment benefits. it is predicted that it is possible that those are not extended, we may have a zero 0.5% decrease in gdp. how might that affect the job situation? >> i don't want to speculate too much on that. certainly, the unemployment insurance benefit is a real significant policy concern. i am not sure i want to make a connection between the two. >> thank you. commissioner, i want to look at some of the areas where there has been an increase. i want to add some good news here.

the private sector number is up 164,000 which is good news. but not gooenough. i notice that number and i want to see if you have this information nearby. i remember going back in the january-a p paroleeriod, we are getting three months in a row or private sector job creation -- where private sector job growth was above 2 20,003 months in a row. >> it averad about 240,000 jobs per month. >> this month is a good number but i was noticing that where we got growth -- the reason we got 154,000 private-sector and

117,000, health care was up by 31,000, right? >> yes. >> retail trade 26,000. >> yes. >> manufacting of 24,000 and mining up 9000 for the one that took the biggest hit was government and that is all government, ght? >> that's correct. >> in terms of the private sector number which is pretty important, ideally, what would we want? what would be a healthier number? if we were averaging in the private sector -- 150000 within the next few months? wi the private number after the close to what the overall number is? we know we can recover one of

its 17,000. we have to get that closer to 200,000 or more. and the correlation between private sector growth and the help of the economy? it is a better to focus on the overall number? >> it is fine to focus on either one. the private sector is giving you some idea perhaps job creation. the government numbers are important but they are an indication of government employment but not quitehe private sector. in terms of strong job growth, we are so deep intoob loss, we have lost quite a few jobs and have fallen behind that we really need really significantly higher job growth than we have had to make a dent. en then, it would probably take years. to recover the jobs.

>> i was noticing the manufacturing job number was up. a good part of that is automobile manufacturing? >> yes, motor vehicles were about half of that. of the this part mfg. #going up in automobiles, is that rebound partly a result of supply issues as it relates to what happened in japan? >> i think it would have been hard tottribute and figure out much of t impact of japan all along. the evidence now if you look of something like motor vehicle inventories that whatever japan a fact there was before is now out of the system. inventories are now back to normal. certainly now and maybe going

forward, you'll probably not see any impact. >> one more question -- on the government number, can you tell us what the overall government number, the decline, has been from july 2009 - july 2010 until now? how many government jobsave lost? >>e are down about half a million jobs. >> thank you. >> i cannot resist asking you this. early this morning when jobs umbers came out, mark azanzandy called these numbers fabulous. would you say the same thing? >> it is welcome to see the numbers but the job growth increase but they are not fabulous. they are still not strong. >> and aias ro mr.an that as

well? it provided some relief only because we were so worried in the last few days where the economy is headed. it is no sect i am not a big fan of the stimulus. it was a lot of money and a lot of dead and few jobs and the impact was pretty limited. we were told that if we passed it, unemployment would be 6.3% today and that is way off. there are about 6 million jobs short. i continue to feel we were told to take the debt that you will get jobs and we certainly got the dead and that is a drag on our economy on business confidence and family confidence. when you look to the job gains in today's report, one view of the job market is that as laos

return to wh they were before the recession, the job nbers improved because new hires have increased very little. they are far below what they were before the recession it seems premature to speak of a real job market recovery to begin with and a meager job gains recently are not a surprise. this is the argument that the rmer council of economic advisers chairman makes and i agree with that. as a look at this report, commissioner, is there a way to distinguish between job gains that result from fewer people leaving their jobs and job gains from a sustained incree in hiring? that sensitivity in different signals of the help of our labour market. -- they send different signals in termsf the health of our

labour market. >> we look at how many pple are exiting jobs and how many people are entering the labour market. your observation is correct. most of the improvement has been that the number of people losing jobs has leveled out and stopped going down. we have not yet gotten a significant increase in the number of people entering the employed. >> is that also why we have fewer people in that market while we had 190,000 step back out of the labor market this month? >> that is consistent with what i mentioned with the labor force. one thing we would like to see is the labor force start growing because people think they will be getting jobs and people start to expect they can move from unemployed to employed in that has not happen very strongly yet. >> retail jobs were up slightly

in report but recent reports of the consumer spending down for the first time in a long time. is there a mismatch there? it is a timing issue when the survey was taken? >> there is a timing issue. some of the earliest that we have from july and this is the start of the third quarter and the consumer spending numbers are back from the second quarter. >> what kind of seasonal adjustments do you make for this time of year? >> it depends by industry. in motor vehicle production, there is a good season because plants close down in july to reto. they reopen in august. there is a part of the bear. teachers around this time. in june and july leave the

labour market for the summer. we have a season there. the last month season was the g one and that was abo -- and that one was about 1 million. we expect the employment to go down by 1 million because of seasonal job loss in june. we adjust for that. the seasonal this month is not quite so big. >> thank you. >> the congressman cummings? >> when you look at the rate of loss of government jobs, when you look at that as a portion of all jobs lost, is a trend in the same over the last year or so? if you lose 50,000 jobs and 10,000 government jobs, is that

the norm for the last several months? >> over the last two years, we have grown about 700,000 job. we have lost about half a million government jobs. the job growth would have been not double t it would have been close to double what it has been without the loss of government jobs. >> centre mccarren hazmat click mark zandy was one of his advisers. -- senator john mccain has made it clear that z markandy was one of hisdvisers. he said we have to move from cutting to creating jobs.

i am trying to figure out if we continue to go at the rate we are going, in other words, if we don't have -- if we don't come up with methodology to create jobs, we will find ourselves in real difficulty and we will only sliddownward. i don't want to see that happen. i know the numbers are not great but what would you tell the president today if the call the right now -- if he called you right now? what would you say? >> i would say it is welcome news that the job growth has accelerated. over last two months. that is good news but it is not yet strong. this is pretty tepid job growth.

we will havto do better in job growth in order to start to really recover in the labour market. >> the african american numbers are pretty stubborn, aren't they? >> yes, they are. >> what about the hist hispanic numbers? >> the unemployment rates to some degree underestimate the problem. the labor force participation rates for both those groups are below average. they sound battered but and maybe worse than it sounds. >> i would guess there are some areas of my district where the african-american male unemployment rate may be as much as 50%. whenever i see those numbers, i

say they are probably low. the chairman talked briefly about this whole correlation between the amount of education and the impact that this recession has had on folks. do you see that trend continuing, the less education you have, the more negative impact the recession has on folks? >> absolutely, the unemployment rate for those with less than a high-school diploma is about 15% and those with a bachelor's degree, is only about 4% which is a pretty significant difference. >> if someone was not watching us right now and they were trying to figure out whwhat kind of feel they might want to go into and what country they would want to get, what area they

might want to move to to get a job, what would you say based upon -- i know you don't like to draw conclusions. based on what you have there in front of you, what would you say? >> obviously, education pays off and is very important. the united states is like other wealthy countries. we are a country of service jobs, service-providing jobs. something like 70%-80% of our jobs are in the service- providing sector. that is portant. you get into so things like the demographics that we've got going on like the health care jobs which i expect would have strong growth going forward as we have an aging population.

that is the sort of thing -- th sort of advice i would give. >> thank you very much. >> unless there are further we'reons, mr. ahall, grateful for your testimony. phil, we hope you can come back inour years of retirement. you said you will be fishing but if you can squeeze in some hearings between fishing, we would love to have you back. unless there are questions and comments, we are adjourned. [captioning performed national captioning institute] [captions copyright national cable satellite corp. 2011]

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>> next week, "washington journal" will look at the job situation. we start on monday with the labor department's workforce training program. tuesday the focus is on a technical education. wednesday, a look at private- public partnerships. on thursday, an assessment of federal jobs programs. friday, opportunities for women in the work force. "washington journal" is live every day at 7:00 a.m. eastern on c-span during a visit to the navy yard and washington do you president obama talked about national veterans finding jobs. the president talked about the latest jobs report, showing unemployment dropped to 9.1% in july. this is 25 minutes. >> ladies and gentlemen, the

chairman of the joint chiefs of staff, admiral mike mullen. [applause] >> on behalf of men and women in uniform and their families, thank you for being here. welcome to the washington navy yard, our navy's oldest shore establishment. this is a special place in american history. through war and peace, sale buildcame together to and repair america's fleet. here opportunity was created and innovation rewarded. here was spent the sweat and uslce ancle and sinew of our

overseas security. the "uss constitution" was brought in for repairs during the war of 1812 not far from here. and here scientists and engineers fashion the components that made possible the accuracy of those guns. it is fitting that here today the president announces a new initiative to put the muscle and sinew and intellect of a new generation of veterans to work again. many of these young people have served five and six and even seven tours. some of them suffer from serious wounds seen and unseen. all of them what the chance to pursue the same dream as every other american. i think back to a young man i

met in los angeles. he fought in afghanistan. was fresh out of the army, unemployed, and homeless. he told me, "i gave my country 100%. all i ask for is 100% in return." that does not seem like too much acid, a job, and education, food on the table. -- that does not seem like too much to ask. they need an open hand when they come home. when the best way to extend that hand to honor a veteran is to hire one. with the right support, the right opportunities, our veterans and their families will not only make incredible contributions to the workplace, but also to their communities as well. they're smart, tech savvy, wired to serve, and great

leaders. they will make terrific employees. i can tell you this, they darn sure know how to show up on time. the problem is that once they leave the service, they can be hard to find and tough to identify. i am convinced there is a sea of goodwill out there of people and organizations eager to help. but there is no easy way to connect our young veterans with the employers and community leaders and organizers that remain so critical to making and sustaining those relationships. so i am pleased and extremely grateful that president obama has focused all of us on doing just that, finding ways to make sure our veterans have the tools they need for success after s ervice and the jobs they need to continue their lives after they have done and given some much for us. he and the first lady have

devoted an external amount of time and personal leadership to this endeavor. do programs like this one, our first family is doing everything they tend to put our military family first. they are doing everything they can to give back that 100%. the president has made our troops and their families his top priority. he's backed that up and day in and day out with substantial changes and resources to make those changes work. i have seen him labor hard over these initiatives and worry about them and drive us all to the other measures of success. he is nothing if not passionate, and yet somehow he does not look a day over 50. [laughter] ["hail to the chief" playing]

ladies and gentlemen, it is my honor to introduce our commander in chief, president barack obama. >> you can go ahead and cheer, too. [applause] >> please, everybody.

i'm just waiting here. [laughter] [distant gun salute]

>> well, thank you very much, everybody. good morning. i'm glad somebody told me that was the last one because i had lost count. it is great to be here at the navy yard. and first of all, i want to thank admiral mullen for being here and for his four decades of extraordinary service to this country. and i want to thank him for saying that for an old guy i look okay. i appreciate that. this may be one of the oldest shipyards in the united states, but today it's used to develop some of the most advanced technology in the military. although i hear your engineers are still working on a solution

to the traffic when the nationals are playing. that's not ready yet. let me start by saying a few words about our economy. there is no doubt this has been a tumultuous year. we've weathered the arab spring's effect on oil and gas prices, the japanese earthquake and tsunami's effect on supply chains, the extraordinary economic uncertainty in europe. and recently, markets around the globe have taken a bumpy ride. my concern right now -- my singular focus -- is the american people. getting the unemployed back on the job, lifting their wages. rebuilding that sense of security the middle class has felt slipping away for years. and helping them recover fully, as families and as communities,

from the worst recession that any of us have ever seen. today, we know that our economy created 154,000 new private sector jobs in july. and that's the strongest pace since april. the unemployment rate went down, not up. but while this marks the 17th month in a row of job growth in the private sector --nearly 2.5 million new private sector jobs in all -- we have to create more jobs than that each month to make up for the more than 8 million jobs that the recession claimed. we need to create a self- sustaining cycle where people are spending, and companies are hiring, and our economy is growing. and we've known that will take some time. but what i want the american people and our partners around the world to know is this -- we are going to get through this.

things will get better. and we're going to get there together. the bipartisan compromise on deficit reduction was important in terms of putting us on sounder fiscal footing going forward. but let's be honest -- the process was divisive. it was delayed. and if we want our businesses to have the confidence they need to get cash off the sidelines and invest and hire, we've got to do better than that. we've got to be able to work together to grow the economy, right now, and strengthen our long-term finances. that's what the american people expect of us - leaders that can put aside our differences to meet our challenges. so when congress gets back in september, i want to move quickly on things that will help the economy create jobs right now - extending the payroll tax credit to put $1,000 in the pocket of the average worker, extending unemployment insurance to help people get back on their feet, putting

construction workers back to work rebuilding america. those are all steps that we can take right now that will make a difference. and there's no contradiction between us taking some steps to put people to work right now and getting our long-term fiscal house in order. in fact, the more we grow, the easier it will be to reduce our deficits. now, both parties share power. both parties share responsibility for our progress. moving our economy and our country forward is not a democratic or a republican responsibility, it is -- it's not a public or a private responsibility. it is the responsibility of all americans. it's in our nature to do the tough things when necessary, to do the right things when called. and that's the spirit that washington needs right now. spiritso the kind of found in the men and women who proudly serve in our country's

uniform, and it's a spirit that endures long after they take those uniforms off. today's veterans are americans who have done their duty. they've fought our wars with valor, from the jungles of vietnam to the deserts of iraq to the mountains of afghanistan. and they include the members of today's military, the 9/11 generation -- some of whom are here today -- who volunteered to serve at a time of war knowing they would be sent into harm's way. to these men and women, i want to say that all of you have served our country with honor. over the last decade, you've performed heroically and done everything we have asked of you in some of the most dangerous places on the planet. your generation has earned a special place in american history. today, nearly 3 million extraordinary service members

like you have completed their service and made the transition back to civilian life. they've taken their leadership experience, their mastery of cutting-edge technologies, their ability to adapt to changing circumstances, and they've become leaders here at home. just think about how many veterans have led their comrades on life-and-death missions by the time they were 25 years old. that's the kind of responsibility and experience that any business in america should want to take advantage of. these veterans are already making an impact, making companies and communities stronger. but for every success story, there are also stories of veterans who come home and struggle to find a job worthy of their experience and worthy of their talent. veterans like nick colgin. when nick was in afghanistan, he served as a combat medic with the 82nd airborne. over the course of his

deployment, nick saved the life of a french soldier who was shot in the head and helped 42 people escape from a flooding river. he earned a bronze star for his actions. but when nick got back home to wyoming, he couldn't get a job as a first responder. so he ended up having to take classes through the post-9/11 gi bill, classes he easily could have taught, just so he could qualify for the same duties at home that he was doing every single day in afghanistan. mariae veterans like canales. she was a financial specialist in the army, helping provide financial support for her unit in iraq. and when she got home, she finished earning her degree in business management. but even with her education and her experience in the army, maria still couldn't find a steady, working job in accounting or finance.

that isn't right, and it doesn't make any sense -- not for our veterans, not for the strength of our country. if you can save a life in afghanistan, you can save a life in an ambulance in wyoming. if you can oversee millions of dollars in assets in iraq, you can help a business balance its books here at home. our incredible servicemen and women need to know that america values them not simply for what they can do in uniform, but for what they can do when they come home. we need them to keep making america stronger. our companies need skilled workers like our veterans to grow, and there's no reason why we can't connect the two. and keeping our commitments to our veterans has been one of my top priorities as commander-in- chief, and that includes helping them make the transition back to civilian life.

fundinghy we're fully the post-9/11 gi bill, which is helping more than 500,000 veterans and their family members pursue a college education. that's why we supported extending the bill to include non-college degrees and on-the- job and apprenticeship training. that's why i directed the federal government to be a model employer and hire more veterans, including more than 100,000 in the past year and a half alone. so today, we're taking it a step further. first, we need to do more to make the transition from military to civilian life easier for our veterans. that's why i'm directing the departments of defense and veterans affairs to design what we're calling a "reverse boot camp." the problem is that right now, we spend months preparing our men and women for life in the military, but we spend much less time preparing them for life after they get out.

so we'll devote more time on the back end to help our veterans learn about everything from benefits to how they can translate their military training into an industry- accepted credential. in addition, we'll make it easier for veterans to go to their local onestop career center and get help pursuing a career that fits them best. these steps will help bridge part of the gap between veterans looking for work and companies looking to hire. but that's only part of the equation. the other half is about encouraging companies to do their part. that's why i'm proposing a new returning heroes tax credit for companies that hire unemployed veterans. and i'm proposing an increase in the existing tax credit for companies who hire unemployed veterans with a disability, who still have so much to offer our country. and finally, we're challenging

the private sector to hire or train 100,000 unemployed post- 9/11 veterans or their spouses by the end of 2013. this builds on commitments that many companies have already made as part of the joining forces campaign championed by my wife michelle and dr. jill biden. siemens, for example, recently met their goal of hiring 300 veterans, so they're aiming to hire 150 more by december. microsoft is helping more than 10,000 veterans get it certified over the next two years. and today, groups from the u.s. chamber of commerce to accenture to lockheed martin have all agreed to do their part to help veterans get back in the workforce. the bottom line is this. we still have a long way to go and a lot of work to do to give folks the economic security and opportunity they deserve. and that begins with connecting

americans looking for work, including our veterans, with employers looking to hire. over the last few years, another generation of young veterans has learned that the challenges don't end in kandahar or baghdad. they continue right here at home. today, we're saying to our veterans, you fought for us, and now we're fighting for you -- for the jobs and opportunities that you need to keep your families strong and to keep america competitive in the 21st century. and at a time when there is so much work to be done in this country, we need everyone's help to do it. so thank you, god bless you, god bless all our services, and god bless the united states of america. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011]

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♪ >> next, a discussion on the role of the public trustees for

social security and medicare. then a conversation with rick santorum. then the july unemployment numbers. on newsmakers, new jersey congressman christopher smith. he discusses how the u.s. is addressing the famine in somalia, the tensions between sudan and south sudan, and u.s. foreign aid in an era of tightening budgets. >> we think good things come in twos. >> live coverage on the house. >> or live coverage of the senate on c-span-2. >> or you can see them at the c- span video library. >> weekends on c-span 3, explore

american history tv. >> listen to us on your ipad or iphone, follow us on twitter or facebook. >> created by cable and provided as a public service. >> next, social security and medicare's two public trustees talk about their roles. the entitlement programs have six trustees, including the secretaries of treasury, health and human services and labor. the social security commissioner and two public trustees appointed by the president. this discussion was hosted by boston college's center for retirement research. >> it's time to get started. steve, sit, please. [laughter] i again have the honor of introducing the speakers.

we are extremely fortunate to have charles blahouse, the current public trustees of the so security and medicare systems. for three years, these slots remain vacant. fortunately for all those, bob and chuck have been selected. bob was the director of the congressional budget office and is now president of the urban institute. chuck started in a strange direction as a ph.d. and computational quantum chemistry from berkeley, but then on the butl and president' bush's economic council and is now a research fellow at the hoover institution. they were chosen for their experience, their policy in

sight, and their many talents, not the least of which is the rare ability to command respect across the policy spectrum. chuck is going to talk about social security. bob will talk about medicare. they are delighted to take questions at the end of their remarks. so let's welcome them here today. [applause] >> thank you for the very kind introduction, and i thank you for inviting me to participate here. i have been looking through some of the papers in the book lists, i wished i had shown up for more of the proceedings. as always, fascinating presentations. i spoke to this conference a couple of years ago, and back then i was a social security, retirement security adviser to president george bush, and when the second term ended, you

thought you were rid of me, but alas, president obama and the senate have ruined that hope. i am now back as a public trustee for social security and medicare, kind of like a song you are really sick of get remade by somebody else. just as it was vanishing from the airwaves in you hear it all over again. sorry about that. it is great to be here because we have the timely and important things to talk about in this setting. for the last several weeks, if not months, washington has been of your with the debt ceiling -- of sorb with the hold debt ceiling -- absorbed whole debt ceiling crisis, and now that that temporarily is past us, we are able to turn to other very pressing economic policy concerns. first and foremost among these are reviews of the public trustees on the actuarial sign,

-- actuarial science, but a lot of them material that is covered in this event is going to be important to policy-makers in the months ahead. most of you know about the trustees process, and you know about what we'd do, but for those of you who are not familiar with it, let me say a little bit about who the trustees are and the functions we perform. there are six trustees. four of them are government trustees, secretary of treasury, labor, hhs, and the social security commissioner. there are two public trustees, one democrat and one republican, guess which one i am at the end of the proceedings -- and these positions were formed in the 1983 social security amendments, and the idea was there would be two external pairs of eyes looking at the projections on a bipartisan basis and substantiating public confidence

that they were put together in a most of jessica -- most objective possible way. i have been a longtime fan of this process, the center of this -- defender of this process, and even before i was a trustee, i would be in the debate over the significance and accuracy of their projections. that is an appropriate thing to occur each year. the projections should be debated and approved for one year to the next, but i have always been in the position of saying i thought process was serving the public well, and i thought projections were released in a qualitative sense reasonable. now i have a high honor of serving as a trusty, that long time confidence and support i have had for the process, i found it only further substantiated by my experience over the last year. i have had the opportunity to participate from inhofe in the

inside, and the clear commitment, object of the, -- the objectivity, freedom from agendas, ideological or otherwise, and it has been a gratifying thing to be a part of. i will talk about social security. ball will talk about medicare. medicare is the difficult one. [laughter] let me begin with what the trustees report projects. before i say how we as public trustees interact with these projections, and seems worthwhile to know what they are. this chart, if you were to pick a single graphic in the whole report that expresses the projections of the trustees in a nutshell, this is the one. of information on this graphic. you see a couple of lines here. everything is expressed as a percentage of the programs

taxable wage base. you can see the ball line -- bold line representing the expenditures, and you can see how they're projected to grow dramatically over the next quarter century as the baby boomers leave the ranks of the work force and enter the ranks of the beneficiaries. in some respects the latest versions of this graph decides -- disguises this democratic phenomenon. -- this demographic phenomenon. if you look at 2008, you see a son spike in costs. -- a sudden spike in costs. we also have a difficult spike in disability claims and some increases in early retirement benefit claims and other things you see as a consequence of that recession. around 2008, what you would see on this graph is a pretty steady an uninterrupted and sharp increase in program costs

relative to that tax base, stressing from about 2008 to 2035, directly as a consequence of demographic change. as the baby boomers move out of the workforce. what this chart shows even though it is focused on annual system operations, you also get information about trust fund financing. if you look at 2036, you see the bolt line coming down, and that is the point of trust fund depletion, where you see this hippocrene the benefits and the -- ucla split between the benefits -- you see a split between the benefits and the resources it will have on hand. this graphic presents the information that combines trust fund depletion as projected for 2006. you can see clearly that this is a situation where democratic

change is causing house to rise -- causing costs to rise lot of income. this phenomenon crests in the 2030's. it is the increase in costs that treats the imbalance between income and outflow. the graph also shows the percentage of benefits that can be financed from revenue once the trust funds are depleted, and that percentage in 200036 and graduate declines in years afterwards. there are a few key summary measures in statistics that appear in the report each year. this year we project the combined social security trust fund will be exhausted in 2006, but the trust funds, there are more than one.

there's the old age and survivors insurance trust fund. there is that disabilities trust fund. the disability insurance trust fund is projected to be depleted far earlier in 2018. the report also contains projections for what i would call the nightmare scenario. what if we do not do anything until 2006? -- 2036? if we fail to act to correct program finances, we will face terrible choices. i was a ridiculous choices. it is not possible to leave -- to believe that our system when annette austerity measures -- would be able to enact austerity measures required in 2006. you have to reduce benefits across the board by 23%, and people already those in retirement, and you would have to hike the tax rate up to 16.4%. one of the things, you do not tend to see qualitative changes in the social security protections. the projections tend to be

stable because most of the factors, unlike the medicare projections, that bear upon the projections in a qualitative way are well-known relatively easy to estimate. if you go back and look at every trustees' report over the decades, you see 0 again the same general cost curve. you might see the imbalance move around a little bit, but the qualitative shape does not vary that much. this year we find that the 75- year actuarial and balance is -- in balance -- imba lance is 2.2% of taxable payroll. that is not a qualitative change. that is a .03% is a bigger deterioration of the scene in a report since 1994.

it is not a qualitative change, but by standards, it is a pretty big one. the reasons for the large single year deterioration this year are presented in the pie chart. it was pilfered from another presentation given -- from another presentation. the vast majority of -- about half of it arises from changes in longevity, updated mortality figures. we are living longer than previously projected. that is good news, but it is not great news for social security finances. the vast majority of the part of the pie chart that refers to demographic changes -- functions, a portion our updated projections also appear in the methods and other day that slice because as we extrapolate in the immediate future, we do it at the rate of change of recent years.

there is a little bit of that longevity change in those slices of the pipe. roughly half of the worsening in this report is because of longevity changes. rather, changes in the longevity data. there is also some worsening because of the sluggish economy and spillover defects reducing immigration, but longevity is the biggest piece of its. -- it. i would say first and foremost that our primary responsibility as trustees is to vet assumptions that go into the projections and sign off on them as being reasonable and objective. reasonable does not need right, we do not know what is right, but we can make a determination whether or not we think we are using the most reasonable assumptions. basically, what happens is the economic and demographic

variables that bear on projections are basically developed by the office of the social security actuary. those recommendations are before us, and we reviewed them, edit them if they require editing, or accept them here the same economic variables are used for medicare reports and social security reports. there are other durables the other developed by the medicare actuary's office, but these come out of their shop. they present us with recommendations for an intermediate assumptions for each variable, and also a low cost for a high-cost carrier of all that represents what would happen if that particular variable broke in the direction that either increase or decrease system cost.

the first two items you see, fertility and longevity, they are very important to the long term sheet of social security finances. a couple of notes i would make. net immigration, it has been my experience when people look at the trustees reports, the immigration numbers often strike them as looking small. i think that is because they are presented as net immigration figures. there is a differential. people coming into the social security arianna and people coming out of the social security area. that accounts for part of the reason why they tend to appear smaller than many people expect. spurred activity is an -- productivity is an assumption that is fly-specked a lot each year. future productivity will be roughly consistent with what has been the average over the last few business cycles. you do not fund the system with productivity.

you fund it with taxes upon wages. an important component of this is what is the share of productivity growth that is expressed as real wage growth. this is important because compensation that is expressed as real wage growth is taxable by social skirting, where -- social security, whereas compensation that comes in forms that are not taxable like other benefits, do not result in additional revenue for social security. there is the wage differential more than productivity projections that is relevant to social security finances. we are projecting a slight increase in real wage growth: ford, based on projections that the share of worker productivity growth going forward expressed as rising real wages will be slightly higher than in the past due to in the past having an extremely high rapid growth in benefits not subject to taxes such as health

benefits. a very important additional matter that the trustees have to speak to his not only what the assumption and the projections are, but we have to tell policy makers how much confidence they should have in these projections. how certain are they. a lot of different ways that the trustees' report speaks to projection uncertainty or certainty, and one of the tasks we have is how we should talk about it and how much emphasis the trustees' report should place on different forms of uncertainty. as i indicated previously, there is a sort of low cost and high-cost scenario built around illustrated assumptions. -- illustrative assumptions. if you took every variable and as soon their broken in the

direction that decreases system costs, then you get a low-cost scenario. if it breaks in a way that increases costs, that is a high-cost scenario. they are meant to be illustrative event region -- they are meant to be illustrative. there is sometimes a tendency to colm to the report and say here's a projection in which the social security trust fund does not become insolvent. op ed writers will occasionally do that. there must be a significant chance that this program never becomes insolvent it all event -- at all. i will say that is the wrong way to think about the trustees scenarios. they are illustrative. did not appear within a broad range of possibilities for program finances. this is an analysis that appears in the report, and it allows the difference rebels to fluctuate -- different variables to fluctuate and shows the wide

range of scenarios that can result from these fluctuations. i have shown one graph resulting from analysis here, and you can see with respect to the long term direction of the trust funds, qualitatively you do not see that much change even under a pretty wide variations in the economic and demographic assumptions. under the medium scenario, that combined trust funds become insolvent in mid 2030's, but d.c. that date fluctuate only in a few years. you will see several years of movement in the insolvency date, but you do not see a qualitative change in the direction or the health of social security. the scenarios are outside the bounds of even that 95% scenario intervals. there is not much basis when you look at the trustees analysis of uncertainty for adopting a wait-and-see attitude towards program finances.

under all these plausible scenarios, we will be much better off if we correct the program finances today than if we waited to a future date. the last thing i would say before turning it over his that the trustees always have an issue of deciding what to emphasize. what is important? the trustees reports last several hundred pages and very few people read them all the way through. i suffer from this melody when i was congressional staffer. -- i suffered from this malady when i was a congressional staffer. there is a lot in there, and policy makers did not have time to wade all through them. we have to choose what to emphasize. that is an important role of the trustees. it is expressed in different ways. when we go to testify before congress and we have a five- minute statement to make, we have to choose what to put in

that statement. when we talk to the press, when we talk like this, we have to talk about what to put in our statement. in the summary and in the message specifically by the two public trustees, we have to make choices about what to put in those messages. i thought i would review a couple of the things that we as trustees or the trustees as a group chose to emphasize this year. one is that we would be much better off if legislative corrections are enacted soon. you're probably tired of hearing this. this has been said in almost every report stretching back for decades. it is important. it is important that policy makers understand it. there are adverse consequences, especially for potentially for all beneficiaries the longer we put off dealing with this problem.

certainly in social security, but also to a larger extent with medicare, the vast majority of the cost growth of these programs taken together occurs before 2035. on the social security side, it is almost always by 2035. then things level off. before that, the primary factor in driving the increase is demographic change. the change the ratio of workers to beneficiaries. this is not to say that inflation is not a significant problem. it grows more significant the further out in time one looks. we have an immediate problem affecting our ability to get federal finances under control and to get these programs finances under control, and it is coming out very rapidly and plays out in the next quarter- century. it is important to understand how wonderful opportunity is in -- our window of opportunity is

then many ways the find by the way in which demographic factors drive the program cost growth and are doing it not only the very long-term, but from now until the mid 2030's. the certainty is different with respect to the two programs, and the degree is different with respect to the two programs, but the fact of the uncertainty is for sure. another item we chose to emphasize, and i will say having appeared with the doctor had a couple of hearings are ready, i am not sure how we're doing it at this point, but it is easy to get distracted by a lot of other debates people 1/2, and people -- people wanted to have, and people want to debate the trust fund, is it real, is not real? people want to debate such as dirty and medicare's relationship to the larger federal budget.

these are important things to discuss. you can get sucked into an angels on the head of the can discussion that can distract you from the reality that regardless of we come out, we have to deal with social security and medicare. i compared this to the blind man feeling the different parts of the elephant. i want to talk about the trunk or the side or the tail, they can all be right, and they all want to emphasize different aspects of the trust fund, and you can choose to emphasize different sides of this the and on what would want to make. as soon as he stepped back from the arcane discussion, step back from discussion about how big a problem is social security rights respect to the larger federal deficit, the bottom line is you come around to the same conclusion. you have to deal with these programs.

a you are better dealing with it sooner than later. there's no interpretation on any side which argue seriously for not dealing with these programs. another point we make is important, difficult to quantify, but we make it in the report, we can show you technically how the costs of repair rises over time. in many ways, we are understating the actual cost of delay because of practical political constraints, practical policy constraints. we could show you in 2036 you would have to cut benefits across the board. they are not going to want to do that.

they do not want to cut benefits for the poor widowed. if you want to get a realistic assessment of how the cost delay plays out, you have to factor in things like we did not want to cut benefits from people already in retirement, we do not want have a sudden reduction in benefits for low-income people, that sort of thing. you put those factors together and explain to policymakers how is the window of options become more narrow with time, the it is the window to solve these problems is closing much more rapidly than he would ever know from these various across the board illustration's we do. we make that point in words and the report and i tried it to stress it when i testify, but the bottom line is that when we talk about the costly and look at that lands, it is bigger than it first appears. with that, i will turn it over to my learned colleague to talk about the more complex of the two programs. thank you. [applause]

>> thank you. it is a pleasure to be here. i have attended a number of these conferences over the years, and have always been interested in what is being transmitted. i want to start by acknowledging the tremendous contribution of the return -- retirement research consortium and all the folks who have worked with them have made over the last 13 years to our understanding of retirement policy and our knowledge of the behavior of those approaching retirement and in retirement. i also want to congratulate the consortium on producing papers that by and large have been accessible to the non academic,

and had been policy relevant. this has been over these 13 years a tremendous investment that will pay even greater dividends in the future as we get around to reforming the nation's's retirement programs in ways that reflect the change in social and demographic and varmints, as well as physical -- environment, as well as physical realities we face. we were asked to say a few words about the responsibilities of the public trustees as well as the challenges that the trustees face in making long- run projections. with respect to the first of these topics, as you might have suspected, no training manual for a briefing in which to roles and responsibilities of the public trust these are laid out excess. -- exists. when i was first called and

asked what i have an interest in being nominated for this position kamakura i asked the individual who called as loss of his colleagues in the white house what the expectations were and what responsibilities were, there was silence at the end of the phone. [laughter] been a researcher at heart, i went next to the statutes and the language and discovered that there were four tds and rated for the trustees -- four duties enumerated. to remind you what they werethe first of this is to hold the trust funds, the legislative language. do we go out to western kenya -- virginia and open the file cabinet -- west virginia and open the file cabinet to is that a heavy lift or a light left?

[laughter] do we do this every year to judge the situation of the trust fund? i have been disappointed to find out that is not the case. no trips. second is to report to congress each year on the past and future status of the funds, is what the reports do. third, report to the contras -- congress immediately if the amount in in the trust fund is too small, which i guess -- [laughter] maybe you have to go to parkersburg and check it out. finally to review policies followed in managing the trust funds and recommend changes. there is no separate distinct roles for the public trust fees from those of the ax of his to -- ex officio trustees.

as you all know, public trust these positions are not particularly visible ones, so you cannot look at the behavior of incumbents and the -- and get an idea of what to expect from an observational standpoint. it would not have helped us because as pointed out, there were no incumbents to observe, and neither can you call up those who will be your fellow trustees, they been cabinet secretaries who have more important things to do than answer questions like this. in any case, none of them nor any of the political appointees in the department who served as their representatives on the working group would have been able to say too much because, for all the time they served, there was no public trust the. -- no public trustees. one can consult with those who

held positions in in the past, what those discussions revealed was that at different times, the public trust these roles have been quite different and there was nothing to generalize about, except there was one common message that i heard from all of them, and that was to be most useful to this process and most effective, the public trustees should collaborate and develop common positions wherever possible, and chuck and i, with one glaring reception, have followed this advice, and the glaring exception is that every time we are in a room with more than two people, i have been come dr. richauer, and he remains chuck. [laughter] then used me for a little while, and then i realized this was his way of saying i am a lot younger than you are.

[laughter] here we are again. i did not go through this investigation. i did not have to go through this to know what the primary responsibility of the public trustees was, and that is to ensure to the public both the integrity of the reports and the object of the and high quality -- objectivity and high quality of the analysis that underlies them. notwithstanding the independence of the actuaries and the social security administration, it is possible that political pressures could make incentives to massage the projections in optimistic projections. those of you who are older thanhchuck remember that during the nixon administration some people in the white house had

obsessions with certain data series and tried to tinker with them. it is not totally fanciful, neither would it be surprising the any of you that while in theory this is a danger that exists today, and practice it is not something anyone should lose even a minute's worth of sleep over. the offices of the actuaries are probably independent and committed to preserving their reputations that have been burned over the years for developing sophisticated methods and producing objective analyses. the department will staffs that support the trustees are highly skilled professionals who take their mission of the object of the very seriously, as does the staff ssa. is also clear from having gone through one cycle and watching the give and take that occurs when the reports are to gather that there is no administration position.

each department and agency has its own perspectives and its own reviews, and as far as i can tell, feels free to express them, even when it is a minority view, even when steve goss is frowning or rick squirming in his chair, in their displeasure. it is an extremely open and funded process, and to be part of the back and forth of the emails, 2:00 a.m. when the final pieces are put together, is quite interesting. the technical panels are another bulwark here that we have, and they are convened periodically. there are two now in process,

and they help to ensure the integrity and quality of these reports trickled as you all know, and some of you may be in the room, these are the most knowledgeable among the most knowledgeable analysts and practitioners on social security and medicare, and what they do is review the assumptions and methods used in past reports and make recommendations about how they might be improved in the future. while this point in our history, the trustees responsibility for ensuring the objective of the and quality of the trustees' report is not a huge issue that requires constant vigilance, there are other roles that we play, and i will talk about them in respect to medicare. the most important of these in my opinion is to be a fresh set

of eyes looking at the report and asking what changes should and could be made that would improve their usefulness. only the public trust these are likely to raise such questions. as you undoubtedly noticed, the structure and content of the trustees reports change as little from year to year. if one is familiar with the previous report, one can open a new report and find the same analysis using a fresh set of assumptions and a new base-year that in the same place with the same charts, with the same supporting analysis. there are many reasons why maintaining such continuity makes a great deal of sense, but at the same time someone should be asking from time to time, whether the reports could be shortened, restructured, or simplified in ways that would

better serve the needs of those to whom the reports are directed, maybe even there would be more people who read the retire reports having heard the confession as a staff person and alicia's wink and nod she does not read them from cover to cover. even the summary document are not very user friendly, they are not the time reading unless you desire to fall as it quickly. to some extent, this is unavoidable, because social security and medicare are large and complex programs, and explaining how their funding mechanisms work and the financial such reasons are likely to change over the next 75 years is no easy task. the use of jargon and technical terms is probably unavoidable. over the years, the trustees

and the actuaries have added more and more information, offering new and useful perspectives and more detailed explanations and analysis. the bill has been dropped. as a result, the reports have become longer and there is a growing danger that the reports could become confusing and hard to follow for those who have not earned a black belt in entitlement analysis, and half of those are in this room right now. it is also worth noting that communication technology has changed dramatically in the last couple of decades, and i suspect most users now access the reports online. one has to ask whether the core of the report could be convinced with much of that the logical discussion and explanatory material related to

web-based dependencies that would be accessible through links the may report. by law, the reports are directed to the congress, whose members have knowledgeable staff to help them convince, summerize, and i just the reports' conclusions, -- digest the report's conclusions, but information in the report is also of great interest to the public and to various interest groups representing current and future retirees, providers, and other groups, and the dependent by and large on the media to translate the reports for them. this raises a second question worth reviewing, which is, to the reports do enough to ensure that the key findings will not be this characterize, exaggerated, or minimized? in general, the media wants to tell a dramatic story, a simple one, and the more crisis areas,

where he lee, the better. -- really, the better. now we will see their real difference between an me, which is technology event -- which is technology. the projections in the most recent medicare report provided a lot of food for crisis talks. first, it revealed that contrary to previous addresses, spending would exceed income for the indefinite future rather than returning to a surplus, which is what the previous report had shown, after the economy began to recover. we have a great headline -- "h.i. underwater and sinking." report also projected that the date at which the trust fund would be exhausted had advanced by some five years from 2029 to

2024, and finally for those who get into the more sophisticated measures of the trust funds' health, the actuarial balance had to serrated by .13% between -- had deteriorated by 0.13% between the 2010 and 2011 report. these bits of bad news and were widely reported. you focused on the reasons, leaving an impression among some that policy changes and a big- spending government may have contributed to the worsening outlook. in fact, as you can see from this chart, all of the deterioration in the 75-year actuarial balance and most of the bad news in the shorter term was attributable to the

fact that the economy in base year 2010 proved to be weaker than was projected in the previous report, and recovery was now expected to be less robust. for example, h.i. taxable earnings were considerably them lower in 2010 than in the previous report, and notwithstanding the real earnings in the last and most recent report were sent to grow faster over the 2011 to 2024 . ,-- period, the revenues are expected to be 1.3% less than in the previous record. nor did the press report the news in its proper context. for example, while the date of the trust fund exhaustion moved to 2024, between the two reports, it was rarely pointed out that this was seven years later than was projected in

2009, which was the last report that was issued before the affordable care act was enacted. currently, the trustees reports due in my opinion an excellent job of providing detailed, balanced explanations of why metrics change from when you to vex, but the story is rarely as simple one. the changes in the assumptions are listed in the analysis is laid out, but often readers are left to develop their own summary explanation. in an era when many americans get their affirmation from sound bites from politicians or from screaming, ill-informed posts on cable television, one wonders whether greater efforts should not be made in the trustees reports highlight short, summary exhalations of the changes that -- explanations

of the changes that take place from year to year and the metrics that receive the most attention by the press. let me conclude by saying a few words about a third question, which is how the inherent uncertainty of projections can be incorporated into these reports can be conveyed without undermining confidence in projections for this year's list of the problems that we face in the future. there is an issue that medicare has two dimensions, one, all of healthcare, and the other is one procurer to medicare. -- peculiar to help -- to .edicare even aldrich as of health care are inherently uncertain the -- as new interventions, procedures, devices, online, and as the delivery systems change. as result, no one really knows with a great deal of confidence what health care will look like

in 50 or 75 years or what it will cost. this problem is compounded by the -- with respect to medicare because it is a program in which the payment schedules that are settled law, and a charge given to the trustees is to protect the costs of that program under current law. however, we can be sure that certain aspects of current law will not be adhered to. the obvious example here is the sgr, the systems will -- the sustainable growth rate mechanisms. for the last nine years along these accounts have been problems all, but congress and the president have waived the discipline of the sgr, and it is almost certain that that will happen again.

this is a situation that is not unlike the dilemma that the congressional budget office faces that did projections for many years on the basis of current law. but current law at the expiration at various points of the 2000 and 2003 tax cuts and non-indexing of parameters of the alternative minimum taxes and other changes that everybody knew would not be was happening. there is a search for an upturn of the baseline that is credible kamakura but-- there was a search for a base line that is credible. but value-free, and that is an impossible task.

we faced a same situation, and what the trustees reports due -- do his estimate current law. when you open the trustees' report, although there are warnings every 15 pages, staring at you, these are numbers for part b assume there is a 29% cut that is going to be extracted. and if that were not the case, the part b spending in 2012 would be 12.6 percentage points higher, and by 2080, it would be 97% higher. we're not talking chump change here. these are very, very significant differences. if one provides two sets of

projections in the reports, will that be confusing? if one provides a second set, assuming that the sgr is not adhered to, there's the question of what should you use in its place? should you use the underlined law which suggests the medical economic index would be used to update the physician fee schedule, even though over the course of the last nine years that congress and the president have on average selected updates that were knocked as high as the nei? this is a huge challenge that we face, to present information that is useful, that it here said the requirements and allow

-- that adheres to the requirements and the law all, and does not confuse the readers. let me stop there and just say that while i have raised issues with respect to the trustees reports, when in no way do i have the answers to these questions. was part of the discussion waved these issues and continues to wave these issues. as chuck has said many times, i just do not know where to come out. there is no good solution. as a final picture for you, you know the chief actuary at the cms has raised concerns, not just about the sgi, but also about the ability of the nation to adhere to the constraints

that are part of the affordable care act and has provided in supplementary material an alternative projection that has the sgi replaced by the medical economic index and has the medical adjustments to the provider payments, as included to the affordable care act. the results of that is backed there is a substantial difference in medicare if we are not able to adhere to these fiscal discipline that the congress has enacted over the course of the past few years.

on that happy note, i will step down. >> thank you very much. [applause] we are almost out of time, but why don't we take a few questions for dr. reischaur and track. -- chuck. [laughter] i just want you to know how valuable that document is that is put out with the trustee's report. just make out one better. >> i am a consulting actuary. i have a specific question for the doctor. why do you think the media suppress the name of mr. foster during the health-care debate? he was hardly heard from a lot

-- at all. i found it almost -- >> i think chuck wants to answer that question. [laughter] we're going to stay away from that. >> we have another question. >> i am seeing medicare advantage be more and more popular with middle income people. some reports are that they're happy with it. and yet, it appears that these plans are trying to exert managed health-care on this population and are being subject to additional scrutiny. the funding support seems to be questionable from year to year. can you comment?

>> that is the kind of question that we take. our public trustees often set aside that and will put that cash bond. it is still true -- put that cap on. it is still true that medicare advantage plans are being paid more than what it would cost the government if their members were participating in traditional fee-for-service medicare. i think a level playing field is the right way to go. unless you can show convincing evidence that the outcomes with medicare advantage plans are

superior. we would probably have debate on additional bonuses for which there are now for those that come out of lower performing fee-for-service services. >> in the last panel there was a question about social security and the point was made at the current generation of people approaching retirement or already retired have got away with not having their taxes raised as would have been

appropriate in the 1990's. but of course, they're still around. you stated that it is very difficult to make chang -- changes in funding for retirees. can that be truly maintain,, going forward? >> first, i agree with your analytical point, which is that the way things look now, we are not heading toward a future of equitable treatment with social security. if you look at a relationship between contributions and benefits for different generations, we have already postponed to the point where younger generations are going to be treated in much worse than the generations before them.

that is one of the consequences of delight. -- delay. as to the question of how long we can maintain this idea that people who have previously retired should be held harmless, the my views on this are evolving. if you would ask me six months ago, i would have given you, and did give the view that it is going to be a political ethic. and as time goes on, the balance of any ultimate changes to assure security are trying to -- social security are trying to fall more and more to the tax increase side because of this desire on both sides of the aisle, not just affecting people already in retirement. but if we continue to delay fiscal repairs, i am not sure that holds true forever. we may ultimately get to a place -- we are rapidly approaching a place where it is simply too heavy a left to repair within a financing structure.

we have already passed the point where we have a 75-year shortfall that is bigger than we have seen before. if we were to delay 10 years more, we would be at a point where the changes you have to make in the short term are already several times larger than anything you have done before with this program. if that happens, then you risk not having a stable financial system. you have subsidized to the point where it becomes a political barrier to changes in benefits, even though that already on the rolls it disappears. a lot of the protection comes from the separate funding structures. >> can i just add a footnote? >> yes. >> the exception to affecting people who had already retired, of course, was the subject in of benefits and come to taxation.

-- the benefit income to taxation. the cracks and the six-month delay in the cola -- >> and the six-month delay in the cola in 1916 -- 1982. thank you. [applause] will the people who are on the next panel come up? [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> next a conversation with republican presidential candidate rick santorum. then of meeting on the july unemployment numbers. then president obama outlines his job initiatives for veterans to the >> this weekend on book tv on c-span2, the life and times of clarence darrow,

attorney. on -- the british citizens who fought for the union and the confederacy. sunday had net income of three hours of your calls and questions ann coulter. her latest is " demonic." look for the complete schedule and our website and sign up for alerts. >> 8, 9, 10 . >> 10, 9, 8, 7, 6, 5, 4, 3, 2, wind. [explosion] >> these are the stakes. to make a world in which all god's children can live or to go into the dark. we must either love each other

or we must die. >> vote for president johnson on november 3. to in this weekend, we look at history of political campaign ads with robert mann. also that day that jack ruby killed a man under his protection, lee harvey oswald. and how messages were crafted and communicated. if the complete we can schedule at c-span data work/history. >> during an editorial board meeting in iowa, rick santorum criticized president obama's decision to announced reductions in afghanistan. he also discuss same-sex marriage, a federal marriage amendment, and what he would do about medicare. this runs about an hour. >> we will go ahead and get started.

this is the "des moines register" editorial board meeting with rick santorum, running for the republican nomination for president. we will keep it very informal. your meeting with a combination of writers and editors, editorial writers, for the "des moines after we kick things off it will be a free for all informal conversation. how much time do you got? >> i think we have an hour. we'll keep it at that. >> let me fire off the first question and then everybody else can dive in when they want, but tell me why given the condition of the country right now, why in the world would you want to be president? >> well, i mean, i announced for president back in june in somerset county, pennsylvania because it was a site of a

place that to me was very symbolic. it was five miles from where flight 511 went down. to me it was a signal of where the threats those who want to ravage our freedom that that battle was first engaged most recently. and secondly, it was about 20 miles from where my grandfather came to this country brought my dad. and that was our own personal fight for freedom. my grandfather came from italy. rejected fascism and in their children's life and he came to somerset to dig coal. a little coal town. the first town he lived in was a town called carpers town. he lived next to the mine and

originally got paid with company stamps. they call it coupons but figured out that was a dead end. long story short, he ended up working in a mine until he was 72 and provided a better life for my dad when he was 7 years of age. and you know, here it was sort of a personal symbol of how america creates the opportunity, you know, the freedom of america, created opportunity for me and for my children. i felt like one of the responsibilities that you have if you're in position to serve your country at a time when you think your country needs that service you step up. looking from the outside thinking what is a guy in my situation both politically and personally doing doing this.

i have seven children ages 7 to 3. you certainly have other things in your life that could gain your attention and you lost your last political race. so why do you think you can make a difference? just felt like i could. as atraveled around the country and i've been doing a lot of media and such, got a lot of encouragement and i just got a sense that the message i was going be communicating was going to be a little different than anybody else. i could serve a role of being part of the process that could bring us a new leader in this country, something i think is actually necessary for the future of our country and for our freedom. >> so how is your message different than the others? >> the message is different and the messagers different. the message is different than in the sense that i've got look at things more holisticically. i see them as all integrated and i talk about it that way. i talk about how our country is

founded on -- on moral principles, founded on a foundational element of society which is the family and that we can have a strong economy. those who have listened to my speeches i talk about the economy. but i also talk about that the first economy is the family. economy comes from the greek word family, excuse me, home. i understand that the first hospital, the first school, the first company, the first church all is the family. if we don't have a solid, stable family we're not going to have a successful economy. look at the staities tick -- statistics. the stronger the family unit, the stronger the family bond in the family. the stronger the economy's going be. i talk about the moral enterprise. i talk about how we have to be a country of strong moral character.

if we aren't if we're a country that defines, talk about life, liberty and the pursuit of happiness. if we're a country that defines happiness that pursues pleasure we're not going be a country much longer. it's what you ought to do, not what you want to do. what you're called to do. edmond burke said we're going d con trained from change from within or change from without. and the less moral and the less kind of charact thear we have in doing what we ought to do, the more government that we're going to have simple of that. if you have any doubt of that look at communities where people don't behave the way they ought. to you will see a lot of government. you will not see a lot of freedom, you will see a poor economy and other things that the a lot of people don't want to see as the future of our country.

can i finish one thing? that's sort of on the policy side. the other thing is i look at folks who are getting in the race. i feel like i bring something to the table both from the standpoint of electoral success in areas of the country and in places where if we're going to win this election we're going have be successful. i got elected in pennsylvania four times in districts that were heavily democrat and obviously the state of pennsylvania is a very tough state to win but i did so. i don't know who's going get but that point the folks who are going be on the debate floor on thursday night, no one has defeated a democratic incumbent. the second one i was matched out. he ended up bailing out of the race before the filing. but i got rid of him. he retired instead of running against me because i think he knew he coulden beat me. and the third i beat a

democratic incumbent. and i ran against james carville. so i've been against the best. we haven't won in the state of pennsylvania since 1988. it's not like i get a whole lot of national attention. i'm the only person in this race by measuring the gallon lup pole from march till july. everybody has had an name increase. they're not talking about me. they're talking about people like john huntsman. yet he gets press every single day, gets lots of attention. no one seems to want to pay any attention to me. i just keep working. i ben it from that because i'm sure they would be saying a lot of nice things about me. but nevertheless, we're going out and we're just working hard

and we have -- i think we have a track record that shows that we have track record for success. the republican primary is not just in iowa but across the country. they see someone over the course has been a fighter for moral cultural issue, economic, fiscal and i think that's something different. i was with hank brown the former senator from colorado was out in denver last week. he said rick santorum was a conservative before it was cool to be conservative. >> i'm just wondering even if one shares your basic view that the family unit and the strength of it is important and should be preserved and it should be, you know, intact and moral, what role does the

president of the united states have to flay that? >> he's the leader of the country. >> and could you be more specific about the family unit and the president? >> the president is concerned about the health of the country and the health of the family is important to the health of the country. >> so how would wow strengthen the family unit as president? >> well, one of the things i would do is would support the federal marriage amendment. i would be active in making sure that states didn't create a situation that was untenable in the long-term which is having 50 different marriage laws in this country. marriage is a foundational element of societies. it's unsustainable. and so i'm someone who would go out and speak and talk about it. one of the issues that we found in states that have voted is there have been 30 referendums from maine to california. 31 times marriage has been

sustained. in most of the states that was not the case when it began. people naturally, and americans want to be very tolerant. they say, look, if people want to do that, it's their business, let them do it. why does it affect me? and they realize it does affect your family. it affects the faith. it affects your children and what they're taught and who teaches them. it has a profound impact on you, everybody. it has an effect on everybody's marriage not just the people who want to get married. if you look at the impact on the family itself and what will happen to the institution of marriage, marriage is what marriage is. marriage existed before there was a government. it's like handing up and saying this glass of water is a glass of beer. you call it a glass of beer. but it's not a glass of beer but it's a glass of water. marriage is what marriage is. you can try to say well, we're

going to make this something else. but it doesn't change of the character what it is. marriage is an essential element of the civilization. it's a formal recognition between the bonds of a man and a woman for the purposes of helping both men and women fulfill their complimentary role in nature as well as create an opportunity for the best situation for children to be raised. that's an intrinsic good to society. my relationship with it is a good thing. but we don't celebrate. it's not as valuable a relationship for society as my relationship with my wife for the purposes of having and raising children and for our own relationships to see what it does for us in our lives. it's fundamentally different. not that two people who love each other whatever kind of love it is isn't important and fine but it doesn't have the value to society and should not

be lifted up and recognized as such because when you do so, you belittle the other. you can't recognize one that has less value intrinsically less value and call it the same and not devalue the other. that's exactly what happens. when you see that happens, what happens with marriage is you've seen it and you go to places where you've seen this over a long period of time. few we are people get married later. they have children out of wedlock and marriage has become a more casual relationships why? because these other relationships are not build on the pro creative elements of what marriage is about and the stability of having children. they're not as stable over time. in fact, they don't even claim that be stable over time. so what we're doing is we're changing the nature and character of marriage which is a destructive thing for society. what it does for religion, we don't -- if homosexual marriage

or other types of marriages is equivalent to traditional marriage, we -- we would say to folks who, you know, are marriage counselors that you don't council for same sex marriage you're a bigot. we see this all the time with abortion and other times of things that we now say illegal even though people find them immoral. that if you don't do what the state tells you to do then you're going to lose your license as a pharmacist. you're going to lose your ability to practice medicine because we don't -- and this is going be even worse because this is considered the bigotted activity. we don't give license to the people who say ha the state says it's good and just. the catholic church didn't want to do gay adoption. so they lost their ability to do adoptions. religious liberty has been trumped.

but now the courts have created a superright that's above a right that's in the constitution. and i think that's wrong. that's a destructive element of this debate and it's not talked about. when we have these debates in the states these things are talked about. people should be able to live the life they want to live. i have no problem with that. the debate is about changing the laws that impact everybody else. and that is a public policy issue. it's not an issue of against anybody. it's an issue about public policy and the impact of that public policy on faith, on family, and yes, on education because now, of course, we have this sexual behavior that's normal. it's natural. it's something that is a good. something that society affirms and so of course, it must be taught that way. and we're seeing it now in some states. being taught to very, very young children which i don't believe parents find

necessarily a good. nor do i find it to be very helpful to children at a time when sexual confusion can be accelerated by the states. so we're talking about profound consequences. how does your marriage affect you? it affects it profoundly? when we have that debate, that discussion, then the american people say, you know what, you're allowed to live the life you want to live, but don't try to reorder society in a way that can undermine the basic structures and values of faith and of education and of family. >> you have said and it was in today's register, in fact, something about pre-schools or education in general usurping the role of family. could you ex-pant what you mean ? >> i talk about this all the time. who's responsible for educating your children? you are. parents are. it's the parents responsibilities to educate

your children. the government is there to help you do what is your responsibility. some have been convinced that it's government's role to educate your children. and there are many government who believe it's government's role to educate your children. that's a flawed approach. parents should have the responsibility and therefore should have the right to structure the educational environment and have the corporation of the state not the resistance of the state to do so in a way that's con sips tent that's in the best interest of their children. why? because they know their children and what their needs are better than the state does. and that is not the way the state system operates right now. it operates in a way that this is what they're going to get. if you cause us a lot of problem -- this is not the best districts. certainly when you see the government from the top

dictating what all the education policy should be and how we're going to order and structure the classroom, you have less and less parental control. as a result you get a poorer education system. you should go into -- let's say you go into mcdo naleds and you get a big mac and nothing es. it's not necessarily what everybody wants or neeleds. and unless we change the dynamics and make it focused around the consumer -- >> what's the federal law in education? >> it will be incredibly limited. i don't come in with the mistake that george bush came in that i'm the governor of the united states. i believe it's the federal jobs and responsibility to resword the education sp. i think it's -- reorder the education system. i think it's our job to make clear cha the education system should look like which i've just done -- >> so is there a role like no

child left behind, the race to the top, etc.? what would you -- how would you do -- >> i would do with education what i think we need to do with a lot of programs that have migrated to the federal level and that is return them to states. and more to the local area. the education system as fewe found from no child left behind and i say i voted for it because i believe we need to have some sort of natural testing to see how we were doing because it was clear to me that we weren't doing very well. but there was a lot of, well, disagreement among the education world as to how well we were actually per foremanning. so i thought having some sort of standardized testing would give us a good idea of how we're doing. it was not a good idea to move states and local school districts to do what we wanted them to do. in retro spect, you know, the teching part was fine. to me, the other part was

negative. i didn't like it at the time. >> would you get rid of it? >> i don't think there's any reason that we have to have the kind of federal intervention. i don't think we need that. i think we need to engage parents and students and we're using -- >> but it's up to the states to do that. that's not on your agenda. >> my agenda is to say exactly what i'm saying and to get that power back to the states and encourage parents, one of the rolls of the legalers of the country is talk about issues that the federal government needs to do something about in a way of a proactive piece of education but still involve themselves and trying to shape the discourse of the country without mandating it. >> is health care a part of those issues? >> the federal roll is -- i

would continue the federal role with medicare. i believe that medicaid should be -- should be sent back to the tates. we should do with medicated what we did with welfare. in fact, in 1996, actually during the welfare reform, senator graham and i introduced a bill to do exactly -- to medicaid what was being done to welfare which is a form of block grant per capita block grant to the states and give them the flexibility to design their health care system in pushing it down to have the kind of, again, solutions, closest to the people who are affected by the decision. so whether it's health care, education, hao housing, food stamp, these programs do not need to be at the federal level. this is not the 1950's where states are all over the map with respect to their ability -- >> would all of those be

blocked grants? >> they woundn't all be the same type of structure, but yes, they would all be limited caps, federal participation and we would orient -- or dwrent programs back to the state level and give them the flexibilitieses to design the program. >> is there any role for the federal government in health care? >> one of the things i've said for a long period of time is, you know, we need to encourage a market in health care. you have a situation where, you know, i believe costs are going be controlled pretty much two ways. they're going to be top down or bottom up. can we create a system as i think we can to create a better opportunity for people to manage their own health care? one of the things i was an advocate for when i was in the congress back in 1992, i think it was, john kasik and i introduced the first health savings accounts.

i've been an advocate for that. why? because it's puts the consume ner charm of the health care. we have a false economy in health care. very that what your family has? what kind of zhurens you? >> we have -- we have an insurance policy that was -- i got my insurance policy through the ethics in public policy center and they had one policy to choose from. so i didn't have a whole lot of choices from the place that i got. at some point we're going have to make a mess de situation as to what insurance policy we'll have -- >> [indiscernible] >> several few thousand bucks a month. >> so what does that tell you about what, you know, the average iowan has to deal with who doesn't have a job? a few thousand dollars a month is out of their reach. >> i introduced a bill, i think

dick army and i did it together to provide equality. i've said this for a long, long time. it's a fundamental unfairness in the tax code that if you have an employer plan, you get a complete tax-free benefit. and if you don't have that you have to pay like i do. why would the federal government discriminate for the people they should be helping but that's the way it is. never never made sense. i proposed a refundable tax credit. i think back in the 1990's it was like $3,000 or $2,000 but that was a whole different time and a whole different cost of health care. and we wanted those numbers simply because we were concerned about budgetary constraints and the like. the wonderful opportunity with repeeling obama care is that

you're going have some resources to deal with this. people want to make commitments to make sure that we have some form of availability for coverage for people and i think having a tax refundable tax credit idea to help individuals and family purchase health insurance is a better approach to do that than the -- than the topped down basically driving most people ultimately off their employers health care and into -- >> do we need to test for that refundable credit? and how much would you have to -- >> i haven't -- i haven't -- again, i have to go back to look at the bill i introduced. i haven't put forth a plan on that yet. but i certainly will take a look at it. and -- and as far as a mean is concerned, generally speaking higher income people don't -- are -- are generally insured. so i think it would probably --

at least originally it was a flat amount of money. but again as you go up the income scale, the amount of people who participate in this will be pretty small. >> [indiscernible] >> being able to keep your children on the health care policy. would you try to keep any of those aspects? >> keep clauses and oversold change. anybody that has insurance right now through their employer who changes employer or mives to another insurance policy already in law was covered under the pre-existing clause. that was never clear by the obama administration. they made it sound like everybody was kicked off their policy that was never the case. if you had individually purr chased insurance and wanted to move from an individual policy to another individual policy then you could get nailed. that was wrong. but the -- the biggest issue with -- with pre-existing

clauses have to do with people who do not have insurance and then want to get insurance. and of course, the reason for the pre-existing condition clauses that you don't want to create a situation where people don't get insurance until they get sick or have an accident. and what and the reason barack obama policy's did not, enforce the pre-existing clauses until the mandate was put in. why? because if you put it before what you do is you encourage everybody to drop their insurance. you don't have to have insurance until you're sick. and of course, why pay the premiums particularly if you're young and singles and you dorchte have to worry -- don't have to worry about that. what it would do is lead to a much higher rate of insurance and much higher premium for everybody who's insured. so, you know, it sounds great but unfortunately there's the law of unintended consequences. and the law of unintended

consequences create as moral hazard that's detrimental to everybody. you say that is a good. it's not real yea good. it's actually can be a bad. there are situations, of course, where people, you know, are in difficult situations because of pre-existing condition clauses and they haven't played that game. and in those case what is you usually find -- by the way, you only ask for a year. so they have covered a pre-existing condition for a year and then after the year they do cover them in most states. a lot of states have open enrollment. a lot of insurance plans have open enrollment. so in the market, are there situation, instance where is this is a problem? yes. but they're fairly limited and what dwhash i would suggest is that using that as an excuse for a government takeover is a

tip of the tail -- >> why do you think the country got millions and millions of uninsured people? >> half of the insured have been uninsured for six months or less. i haven't seen it recently. but the uninsured population generally turned over very quickly. so it's not a long-term inuninsured issue. depending on what immigration group you believe in, anywhere from 8 million to 12 million. so you've got 45 million -- i don't know what the number is. that's the number it's that's been thrown for a long time. >> who are uninsured. >> so you have roughly a quarter to a third of those -- of those folks who are not going to be covered under any system unless we're going to

say we're going to go out and guarantee insurance benefits to people who don't have insurance benefits. there are not very many people who support. if you look at another pot that are -- you should talk about fairly small percentage of the population there's a chronic uninsured population. as what you see is you have billboards all over des moines trying to sign up for medicated. there's a sizable amount of people who are eligible but don't participate you in it because they don't do what's necessary to do so. >> so you look at the product, uninsured, it's a very small number. again, do we need to transform the entire health care system to take care of a very small niche of the problem? >> there's not a problem in the country with health care? >> i don't think i said that.

i said it's a very small number who are chronically uninsured. >> for those few people -- >> for those few people then i talked about before, you provide a refundable tax credit. you provide an opportunity for them to get a basic policy. the basic policy that certainly i would encourage them to do is have a medical savings account by catastrophic insurance which is relatively inexpensive.is th? no, but not everyone has the best house, the best food, the best car. this is what we have to begin to look get. all the other necessities of life, we allow people to have varying degrees of creature comforts, if you will. we are people that rationale for resources based upon what is important to us. health care has to be one of

those things. it is in the mix of things we make decisions about as to what type of money we want to allocate. one woman came up and complain that she has to pay $2 a month for prescription. i summed it up and said this $200 a month keep you alive. she said yes. and i said you're complaining? what is your cell phone bill? what is your cable bill? how can you say -- you have to wonder dollars a month to keep you alive and that is a problem? that is a blessing. it is the idea that has been permeated throughout this country that health care is something you do not pay for. is someone else is going have to dictate how we can constrain that cause, and i use the example of another necessity, the greater necessity is food.

should every american have food insurance, a right guaranteed for food? >> some were. >> is were for a very limited number of commodities. i came from the state of pennsylvania's and we did not have big farm programs. we did not have it for the apples of for the peaches or for the strawberries. go on down the list. we had a program for the main staple crops as well as for things that we didn't need, like cotton. which had very little to do with keeping food prices low and everything to do with the politics of agriculture. i will except that, but it is only a limited area of agriculture, not a broad area. we did not have a federal

policy where we encourage people to buy food interests. but if we did, how much food we would consent? $500 a month and get all the food you wanted and then have a small copiague, you could stuff in your card, check everything else, that's five and a $32, and you pay $40.12. how much are people going to shop? how much are people going to worry about how expensive it is? we see this all the time. you have a pain in your back bothering you for a while, you go to the doctor. if you had to pay for the cat scan, you would say, maybe i felt i heard, and if it is the $400 for the cat scan, you would not do that. but you do it now because you

pay a copayment of $40. thatbody here pays for $360. is there one chance that something very severe is happening? but unlikely. those of the kinds of things that happen every single day in the health care system more people are not connecting treatment to dollars. they object to connecting treatment to dollars. the only way that government has dealt with that is to control from the top, limit the access to care, which is actually which is going on with obamacare. >> we just had a bruising battle over the federal debt ceiling. it looks like we're not out of that yet. >> not by a long shot. >> talk about your philosophy about government debt and

spending and deficits. >> i have a long track level one third of one of the principal advocates to a balanced budget amendment to the constitution did i think that is a long-term answer to maintain fiscal responsibility and i would argue to maintain freedom. the year about how freedom is it essentially at stake in this election. obamacare being, i think, the nail in the coffin to take people's freedoms away and have them completely dependent on the government for things essential to their life. limited government is forever going to be gone. we see that in every socialized medicine the world. it becomes a huge part of people's lives and freedom is a zero sum game. the government has control or you have control. in this case, things are flipping. one of the reasons i support the balanced budget amendment is

that it limits the size of government 18% of gdp, the historic average since world war or -- war war ii. by limiting government as a percentage of gdp, you will guarantee freedom. the guarantee that the government will not take away like under barack obama's budget, 40% of the economy of this country. it is just a fact. when government is that big, it controls too much. i think that having a cap on the size of government and having a requirement that we balance the budget, create an exit ramp, if there is an emergency, if 3/5 of the house and the senate decide and the president decide to exceed that, we can do so. and as a constraint on the senate. you need three things to do anything there in europe -- which means they do not do anything.

you have to get 3/5 of the house. it is not easy to do, especially something that might be by passing a constitutional requirement. that is the way that it should be. >> even urgent needs are difficult to get through a simple majority of congress, let alone two thirds. >> we find it depends on the leadership of our culture. it is very hard with no leadership in this president has provided no leadership in this fight. >> what would you do? >> look at my record. how was the author a welfare reform. we ended up federal entitlement. bill clinton signed it and i got almost half of the eight senators to vote for. we were able to do with income support -- some people would see

even more of a something that the left would hold onto, in comes a corporate we want to end the federal entitlement to income support. >> what some of the places that you would cut in the federal budget? >> a whole host of programs that would send back to the states. i'll tell you one place. blog grants, well, block grants, with a welfare, we capt. -- cap it. the problem is the growth of these programs. >> where would you cut? >> in washington, most people would agree that if you take a program growing at a%, which is what medicaid is growing at, and you say it is not going to grow at 8%, that is a cut.

that is reducing the federal government's obligation on an issue. the sanding with a stem. >> let us say the balanced budget amendment is in place today. >> i do not advocate -- some people in this race they can balance the budget tomorrow. i think that would be irresponsible if a 42% of the budget. q can i cut that tomorrow. >> when can you? >> it looks like it is five years from ratification, and that would take anywhere from to four years. you're talking about a glide path. i think that is responsible. but the first things you do to reduce the budget deficit is to get the economy going. we have a president who is done everything to stifle growth by oppressive government regulations. i saw on the house floor couple of days ago, i think he said

that government regulations promulgated last month were costing business $10 billion a month. it is suffocating. with all the regulatory agencies, so thing we need to do is to look at how we can get growth going in this country through changes in the regulatory environment, from what this president has done. it is government controlled, we know best, we will tell you had a run your business, from health insurance to farming, the government says this is what you have to do and how you do it. sorry about that. it is at contracting in paralyzing business, creating uncertainty. the presence of return in light ikon roosevelt, the to crap out of the business community. tell how bad they are, we're

going to go after them and tax them and regulate them. if you have someone who is going to be aggressive, and to- business, as the president is, they do not have to. you throw on top of that the fact that he wants to implement this see huge new health care bureaucracy, taxes will be in place, mandates in place, businesses are saying, and then throw another one, the president has done more to drive a cost of energy than anyone in this country. if you are not allowing permits in alaska, we have a pipeline that may be shut down because there is not enough oil going through it, the flow of the oil may stop. we're in a situation where we are not court to lose the pressure have right now and the president is doing nothing about it. given the opportunity to drill in anwar, no.

north dakota, north. offshore, no. deepwater, now. and then wonders why gasoline prices are high. within a few years ago, the second largest natural gas accumulation in the world. they are drilling 3000 wells in pennsylvania. we have the second-largest world population in this country. and people have wells drilled in their backyard. you know what? sure there are complete. the hydrocracking going on, it's disruptive, small towns and the roads are getting beat up. but we're getting wealthy in producing a tremendous amount of energy. it will be there for so long as the eye can see. people going to start move back to america and look for things to for a natural gas and chemicals, and we can do the

same thing with the oil. if we have a president they goes out -- we get 263 years all oil left in the ground. at this rate of extraction. it would double the rate, which is a level one and did 30 years left. we found a new oil find. technology is able to get to these reserves that we were not able to get to. >> is there anything element -- off-limits? no, why? come to pennsylvania. we are drilling all over the place, in people's backyards. you've got about two or three weeks of intense activity and you actually drill the well and fracking the stone to release the gas, you have to pump from the gas it -- from the ground that is set.

people live with this for years and years. this is not a dangerous activity. it is not inherently dangerous greed and anwar, have any of using pictures of anwar? people say iowa is flat. i'll is the rocky mountains compared to anwar. it is flat, frozen, a tundra, 10 months out of the year. nothing was there. we're drilling in people's backyards in pennsylvania around children. and that is ok but we cannot drill where there is a carrot to the walks by their once a year? this makes no sense at all. they have a president who is in an energy crisis, and he is saying i caribou walks by, and we can i do something that is good for our country and our economy? that is a rigid ideology. i do not. i just do not understand how

people can sit there and say that this is a rational policy. that we can sacrifice the economy of this country -- we're worried about people, make sure the people in alaska had jobs. we would produce more oil and have a stronger economy. i suspect that some would say we cannot do that because of the caribou. then come to talk to me about being concerned about the uninsured. we cannot have it both ways. you have to look at what is rational and reasonable for in the president is an ideologue driven by a belief that we need to have less. in government needs to be rational and reasonable. >> energy policy is first and foremost. when i was traveling around iowa, i proposed manufacturing

going again. i grew up in butler, pa., steel town. most of my friends at could middle income salaries. and it was what created a stable, healthy, great place for kids to grow up. that was growing up, we had 21% of this population. i think that was the reason we all lost a great middle. it is one of the reason we have folks who have lost insurance, because we do not make things here anymore. because the technology, the people necessary to make those things have dramatically reduced grid we have to make more clear keeping the employment levels of. -- dramatically reduced. we have to me more to keep the unemployment levels down. natural gas is heavily used by industry. with its stable, now we have one of the things and you can do the

same thing with though, to the things that is an incentive for manufacturing to come back here. the use energy much higher than other businesses. we can create lower energy prices and provide the stability over time, and on top of that, a competitive environment for them to be successful. i have done that. i have proposed a 0% corporate tax on all manufacturers in this company. we will say to those who want to manufacture here, not just that our market, but for export markets, they will not create a system to do that. one of the big problems for manufacturers is that our tax system does not lend well with other countries around the world. so we're at a competitive disadvantage because of our tax structure. many do in that and encouraged people to come here not just to -- so we can be an exporting

country. that is an important element of increasing the quality of life and the energy in the coming. >> i would ask about at all. aside from the tax issue, is their role for ethanol in this country? is it a net good or a net bad in your view? >> i try not to say good or bad. i say what the market would dictate. and to all energy producers, wind and solar and all these other programs, we shall let the market work on energy. encourage production. i am for more energy production. i am not neutral on that, i am for it. if we can create a market where we can get through things like following expanded drilling and things like that, then we will have a much more robust energy future. >> you would oppose the tax

incentives. >> i would phase out the blended credit. the industry was concerned about distribution, so i signed off on this 4.5 cents b in dedicated to distribution expansion. there is an inherent problem with access to markets with ethanol, because of the people who own the distribution chain in this country. you like to say the market needs to work. but if it is controlled by a competitor of the product, then i think that is a legitimate place for government to step in and said we have to provide access to a commodity that should be in the marketplace. >> i learned a lot from steve. it is amazing, i had a little

coarse from him and some of the folks on the staff. talking about the dramatic technological advantages made in ethanol to make it more competitive and makes it a product that could compete on the market. every time i meet with a group of ethanol folks, you do a job promoting your product. you hampshire, south carolina, texas, pennsylvania, ethanol is a boondoggle. energy consumer, it is this, it is that. that was true back when i was voting against the yen 1990's. but it is not true anymore. have stood up and said, like an aa meeting. and time it didn't make economic industries -- cents per but to the credit of the industry, they have improved the efficiency and

technology. allegorist came out and said that it was not. i figured that they confirmed to meet that we probably are heading down the right path. i think that it does have a role in the energy mix. but i've said to oil and gas into coal, level playing field. we're going to treat every business equally, which means that every business would give like every other business, depreciation, all the stuff that to give to every other business should be given to the energy industry. but not extra credit for extra things beyond what and there -- any normal business would have predicted right of advertising and do things that are normal tax treatments. but no extra tax treatments for the industry. >> taking a back to the

question on the role of the family. what about parents to work outside the home? should go live stay home and take care chris. >> i'll not make that decision for anybody. i will try to create an environment where there is flexibility where for the parents was to say home, the government is not the reason that they are not. if you go back to the days where there were more people staying home, one of the paris staying on, there are a lot of reasons for that. but one of the reasons that we've seen that dynamic change is that the increase in federal taxation. if you go back to 1952, the average tax paid was 2%. ellis the social security tax. now that average is over 50%

peripheral on top of that other taxes, income taxes, your average family does not a lot as far as a percentage of income, but it is another 2% on top of the upper you're looking at 27% to the average american family paying to the federal government in taxes. the second earner of the family bringing in -- and i have knowledge if these numbers of years, but what it was, the average second earner brings in 25% of what the first earner brings in. just do the math. what is the person doing? they are making it up the difference from what the government took and what the government takes now. we're no better shape. someone working outside the home to pay the federal government

for what it is taking away from the american family. you can make a guess that there are lots of reasons other than financial the people go out and want to work. but that is their decision. i came from family where my mom and dad both worked. my mommy more than my dad. nothing inherently wrong with people they want to do that. but i will tell you that a lot of families to know what to do that. the reason that they feel that, why can we be like we were when i was growing up as a kid, and one of the reasons is because of the taxes the federal government takes out of the families bottom line. tin talking about the way forward in afghanistan. >> i give the president credit for making a commitment to follow through with the general's request.

but demand of fatal error in my opinion by telling the enemy when we were leaving. or that we're going to leave. director remember, the name of the movie that i saw with helicopters are flying away, during the time of the -- no, that is somalia. i'm talking about afghanistan. the mileage of the inner standing there, and helicopters are flying away, and the americans basically it and it -- abandon afghanistan to to very difficult fate. the afghanis have expressed americans not stay in their -- staying there. kerry are in a situation where we're back to that, when the press and says we're leaving. i didn't not think that it is not for purely political reasons.

that is reprehensible. the president the united states would put his political fortunes ahead and doing what is right for the men and women he has asked to go out there to sacrifice and i protect our freedoms, and that he is putting an artificial deadline all centered around his political fortunes. >> what is your endgame course -- in the endgame is success. he made the commitment to succeed and you find that things probably -- and you have a strategy. success does not mean wiping out the taliban and having a jeffersonian democracy in afghanistan. it means having control of the state, the taliban being a manageable threat by the government that is in place.

and the government place is not necessarily the government that is their right now. one of the problems is that we've invested way too much on hamid karzai. and not enough on the traditional ways that the afghans have been able to successfully govern themselves in the past. we need to look get the kind of governance structure that we need in afghanistan. but the one thing would tell them is that we're not going to walk out on the. >> that could take several more years. >> there is a threat to this country with a reconstituted taliban in afghanistan for we saw that threat in vivid terms on i/11. we of an obligation to leave the country in a place for that threat cannot be returned. that is the objective and afghanistan. >> that you for your time. in my pleasure, thank you. to him we enjoyed it. >> thank you, pleasure.

>> yes, a joint economic meeting on the july unemployment numbers for the president obama a lot said johnson predicted jobs initiative for veterans grid after that, a discussion on the role of the public trustees of social security and medicare. >> every weekend, american history tv on c-span3 highlights the one under 52 anniversary of the civil war. this week, one of the most important documents in our nation's history, the emancipation proclamation. all law professor on abraham lincoln and the proclamation's constitutionality. the civil war every weekend on american history tv on c-span3. >> this month, c-span radio features more of the lbj tapes airing for the first time, final releases from the johnson library for the saturday, hear conversations between the president, the secretary of state, and the senate armed

services committee chair. >> i am trying as hard as i know how to get that peace in viet nam as quickly as i can. so for that reason, i am not running. >> listen on ex-im satellite channels, an online at c-span radio.org. >> the bureau of labor statistics has announced that the economy added one under 17,000 jobs in july, a drop in the unemployment rate slightly to 9.1% predicted the agency testifies about the report before the joint economic committee on capitol hill. this runs about 55 minutes.